Gold prices rise to one-week high

Gold prices climbed to a one-week high on Wednesday, marking a third consecutive day of gains, fueled by a weaker dollar and growing tensions between Russia and Ukraine, which heightened demand for safe-haven assets.

Spot gold added 0.2% to $2,636.59 per ounce by 0538 GMT, its highest since Nov. 11, News.Az reports, citing Reuters.

U.S. gold futures climbed 0.3% to $2,639.80.

The U.S. dollar's rally paused after gains last week, making bullion more attractive to buyers holding other currencies.

Russian President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks, days after reports said Washington had allowed Ukraine to use U.S.-made weapons to strike deep into Russia.

"The U.S. authorization and Russia's response, which could lead to use of a tactical nuclear weapon, is contributing to market uncertainty, boosting safe-haven assets like gold," said Ilya Spivak, head of global macro, Tastylive.

Elsewhere, several Federal Reserve officials this week are expected to potentially shed light on the U.S. rate cut trajectory.

Currently, traders see a 58.9% chance of a 25-basis-points cut in December. Recent strong data and U.S. President-elect Donald Trump's proposed tariffs have pointed to rates remaining higher for longer.

The market is adjusting its expectations for the Fed's cuts next year as inflation is becoming a bigger concern, which could be negative for gold, Spivak added.

Higher rates reduce the appeal of non-yielding gold.

Meanwhile, Kansas City Fed President Jeffrey Schmid said that it remains uncertain how far rates can fall, though the initial reductions are a vote of confidence that inflation is returning to its 2% target.

"I doubt gold will simply reach a new high and bears are lurking below $2,700 to short it down to $2,400," said Matt Simpson, senior analyst at City Index.

Spot silver fell 0.2% to $31.14, platinum shed 0.3% to $971.54 and palladium edged 0.3% lower to $1,031.92.

News.Az