Gold’s losses last week were driven by reduced haven appetite following a US-brokered cease-fire deal between Israel and Hezbollah that came into effect mid-week. Still, fears about an escalation in Russia’s war on Ukraine continue to support demand for safe assets such as gold.
Markets are preparing for US nonfarm payrolls figures later this week, which may influence the Federal Reserve’s rates decision on Dec 18. Lower borrowing costs typically benefits gold, as it doesn’t pay interest.
The precious metal is up about 30% so far this year, with gains supported by the US Federal Reserve’s monetary easing cycle, central-bank purchases and heightened geopolitical and economic risks. Some analysts expect fresh records in 2025, with Goldman Sachs Group and UBS Group both issuing bullish outlooks last month.
Spot gold was down 0.4% to US$2,632.11 an ounce as of 9.13am in Singapore. The Bloomberg Dollar Spot Index was up 0.3%. Silver, platinum and palladium all declined.
