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Gold prices rose on November 21, 2024, marking the fourth successive day of gains amid renewed geopolitical tensions. The gold price surge is particularly due to the heightened Russia-Ukraine conflict, boosting safe-haven demand. Spot gold gained 0.
3% to US$2,657 per ounce, its highest since November 11. US gold futures also advanced 0.3%, to approx.
US$2,660. The gold price surge is because of the increased anxiety among investors as Ukraine launched a series of British Storm Shadow cruise missiles into Russian territory on November 20. The Ukrainian strike was a repetition of a similar missile attack that used US missiles earlier this week.
Global tensions were further fuelled when the US vetoed a UN Security Council resolution for a ceasefire in Gaza. Market analysts like Kyle Rodda from Capital.com, believe that the upward momentum of the bullion prices is sustained by the increased fear about a broad regional conflict, rising nuclear threats, and general economic risks.
"Gold's appeal remains bolstered by these tensions, along with a low interest rate environment," said Rodda. A weakening US dollar, which retreated 0.1%, also made the precious metal more affordable for international buyers, contributing to a gold price surge.
Investors remain focused on upcoming comments from US Federal Reserve officials about the outlook on interest rates. The market is currently weighing on a 56% chance of a 25-basis-point rate cut by the Fed in December, according to the CME FedWatch tool. Despite potential headwinds from a rate reduction, analysts maintain a bullish long-term outlook for gold.
Rodda emphasised that while a rate cut may temporarily affect gold's performance, its future remains positive due to persistent global uncertainties. The SPDR Gold Trust, the largest gold-backed ETF, showed a 0.36 percent gain in its holdings to 875 metric tons on November 20.
For this reason, there is strong investor interest in the precious metal. Other precious metals also rose in price, along with gold. Spot silver increased by 1.
1% to US$31 per ounce, platinum by 0.3% to US$965, and palladium increased by 0.7% to $1,028 per ounce, approximately.
The escalation of the global geopolitical crisis has turned gold into a safe haven for investors. More appreciation in gold price can be expected in the coming months. Investors will continue to keep a close eye on the Federal Reserve policy as well as geopolitical developments for market swings.
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