Gold Poised for Best Weekly Performance in a Year Amid Geopolitical Unrest

Highlights:

• Gold Surges Amid Geopolitical Tensions: Spot gold rose 0.7% to $2,688.70 per ounce, heading for a 5% weekly gain—its best performance since October 2023.
• Russia-Ukraine Conflict Escalation: The launch of a Russian hypersonic missile and Western approval for advanced Ukrainian weaponry heighten safe-haven demand.
• Bitcoin Rally Adds Momentum: Bitcoin’s 40% surge post-U.S. elections and expectations of regulatory easing further bolster gold’s appeal.

Gold prices are on track to achieve their strongest weekly performance in over a year, fueled by escalating tensions in the Russia-Ukraine conflict and speculation about U.S. interest rate cuts. At the time of writing, spot gold climbed 0.7% to $2,688.70 per ounce, marking a nearly 5% weekly gain, the best since early October 2023.

Geopolitical Tensions Drive Safe-Haven Demand

The ongoing Russia-Ukraine conflict continues to heighten demand for gold as a safe-haven asset. On Thursday, Russia escalated the war by launching a hypersonic missile at Dnipro, Ukraine, following the approval of advanced Western weapon use by the U.S. and UK.

Marex analyst Edward Meir attributed gold's rise to geopolitical instability, alongside economic risks and low interest rates.

Bitcoin Surge Provides Additional Support

Gold's appeal was further bolstered by Bitcoin’s rapid ascent, which has surged over 40% since the U.S. elections earlier this month. Expectations of relaxed cryptocurrency regulations under President-elect Trump are fueling the rally.

Outlook for Gold Remains Strong

Investors are weighing the potential for interest rate cuts in the U.S., which would support gold prices. Combined with geopolitical uncertainty, these factors position gold as a key asset for risk-averse investors.

As geopolitical and economic risks intensify, gold’s status as a reliable safe-haven investment remains unshaken, offering potential for further gains in the weeks to come.

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