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Gold gained for a third day, bolstered by rising demand for haven assets following an escalation of tensions in the Russia and Ukraine.
Bullion traded above US$2 640 an ounce after advancing by more than 2 percent over the first two days of the week.
On Tuesday, gold gained after President Vladimir Putin approved an updated nuclear doctrine that expanded conditions for using atomic weapons and Ukraine made its first strike into Russia with American missiles.
Investors typically seek safety in the precious metal at times of geopolitical and economic uncertainty.
Gold’s strength this week has also been assisted by a slide in the US dollar, which has rolled back some of the strong gains made in the wake of Donald Trump’s US presidential victory.
“Heightened geopolitical risk, coupled with broad market uncertainty and rising concerns about unknown risks since the pandemic, has rekindled interest in the gold market as a safe-haven asset,” Standard Chartered Plc analyst Suki Cooper said in a note. “But macro factors — including the US dollar and rate-cut expectations — are likely to set the tone in the near term.”
Bullion has rallied by more than a quarter this year, with gains underpinned by central-bank buying, the Federal Reserve’s pivot to monetary easing, and geopolitical tensions in Europe as well as the Middle East.
Goldman Sachs Group Inc. has backed the metal to extend its advance to US$3 000 an ounce next year.
Spot gold was 0,3 percent higher at US$2 639.06 an ounce at 9:16 a.m. in Singapore.
The Bloomberg Dollar Spot Index was flat, after falling almost 1 percent over the previous three sessions. Silver was steady, while platinum and palladium edged lower. – Bloomberg4
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