Investing.com-- Gold prices rose on Tuesday, extending a recovery from two-month lows as the dollar retreated from recent peaks, while increased tensions between Russia and Ukraine also fed safe haven demand.
The yellow metal rose sharply from a two-month low this week, as a rally in risk-driven assets, in the wake of a Donald Trump victory in the 2024 presidential election, also appeared to be petering out.
Spot gold rose 0.8% to $2,632.81 an ounce, while gold futures expiring in December rose 0.8% to $2,636.35 an ounce by 4:39 p.m. ET (2139 GMT). Spot prices surged nearly 2% on Monday.
Gold benefits from safe haven demand on Russia-Ukraine tensions
Media reports over the weekend said the U.S. had authorized Ukraine’s use of long-range missiles to attack targets deeper in Russian territory.
Russia warned of dire consequences if Ukraine did carry out such attacks, as Moscow continued to launch missile strikes on several Ukrainian territories.
Any potential move by Ukraine to attack Russia with long-range missiles could mark a severe escalation in the long-running conflict, with gold seeing some safe haven demand on this notion.
Dollar, yields drop amid Dec rate cut bets
Gold and broader metal markets also took some support from weakness in the dollar and Treasury yields, as investors bet that U.S. interest rates will still fall in the near-term.
The dollar eased from a one-year high over the past two sessions, while the 10-year Treasury yield fell after hitting an over five-month high last week.
Weakness in the dollar came as strong inflation readings from last week, coupled with less dovish signals from the Federal Reserve, only slightly deterred bets that the Fed will cut rates in December.
Traders were seen pricing in a 55.7% chance for a 25 basis point cut in December, and a 44.3% chance rates will remain unchanged, according to CME Fedwatch.
Platinum futures traded lower adding 0.6% to $980.25 an ounce, while silver futures rose 0.3% to $31.328 an ounce.
Among industrial metals, copper prices also saw some relief from recent weakness in the dollar. But the red metal was nursing steep losses over the past month, amid persistent concerns over slowing demand in top importer China.
Benchmark copper futures on the London Metal Exchange gained 0.3% to $9,122 a ton, while December copper futures added 1.2% to $4.1673 a pound.
The People's Bank of China is set to decide on its benchmark loan prime rate on Wednesday.
(Ambar Warrick contributed to this article)