Gold Price News: Gold Price Rises As Risk Intensifies

Gold prices pushed higher on Tuesday, building on Monday’s gains, as the markets reacted to a weaker dollar and a rise in geopolitical tensions linked to the Russia/Ukraine conflict.

Prices climbed as high as $2,640 an ounce, compared with around $2,613 an ounce in late trades on Monday. The gains came as the US dollar pulled back at the start of the week from recent highs against other major currencies. The renewed strength came after gold prices sank to a two-month low on November 14^th.

Markets fret over conflict risks

Gold found renewed interest due to its safe-haven appeal at the start of the week, as tensions continued to simmer over the conflict between Russia and Ukraine. Ukraine for the first time fired US-supplied longer-range missiles into Russian territory this week, according to news reports, raising concerns over a general escalation in the conflict.

Market positioning

Gold’s recent drop to two-month lows came alongside a clear net outflow from gold-backed ETFs in recent days. Investment flows had been declining since late October, but the trend became more pronounced as November got underway. Europe saw outflows of 18.2 tonnes in the week to November 15^th, while Asia saw an outflow of 5.7 tonnes, according to World Gold Council figures released on Monday. That followed a net outflow of 10 tonnes from North America the previous week, the figures showed.

Upcoming events

Looking ahead, Wednesday will see a speech by ECB President Christine Lagarde, which may provide further clues about the state of the EU economy and monetary policy going forward. Beyond that, the markets will be looking ahead to Thursday’s weekly US initial jobless claims figures for an update on the state of the US labour market. Figures from interest rate traders indicate a perceived probability of just under 60% that the US Fed will cut rates by 25 basis points at its upcoming meeting on December 18^th – a supportive factor for non-interest-bearing precious metals.