Gold hits 1-week high as Russia-Ukraine tensions boost rush to safety

Nov 19 (Reuters) – Gold prices climbed for a second consecutive session on Tuesday, hitting a one-week high as mounting Russia-Ukraine tensions sparked a rush for safe-haven assets, while investors awaited key signals on the Federal Reserve’s interest rate plans.

Spot gold rose 0.6% to USD 2,628.76 per ounce by 01:42 p.m. ET (1842 GMT), hitting its highest level since Nov.11. US gold futures settled 0.6% higher at USD 2,631 per ounce.

On Monday, gold jumped 2%, marking its biggest one-day rise since mid-August and rebounding sharply from a two-month low hit last week.

“We think that the overnight reports on Russia changing its nuclear doctrine following Ukraine’s first long-range missile strike on Russian territory have led to some safe-haven flows in gold,” said Daniel Ghali, commodity strategist at TD Securities.

“Barring another consolidation in prices, speculative investors just don’t have enough dry powder in their war chest for gold to resume its upward trajectory at this juncture.”

Gold’s allure is bolstered by geopolitical tensions, economic risks and a low interest rate environment.

Multiple Fed officials are scheduled to speak this week, which could offer further insights about the rate-cut path.

Traders currently see a 63% chance of a 25-basis-point cut in December.

“Since the arguments in favor of gold have not diminished, the lower price level is apparently leading to buying interest,” Commerzbank analysts noted.

Geopolitical uncertainty, central bank buying, and swelling deficits in the United States and other western nations are further supporting gold, the bank said.

Also supporting bullion was the dollar’s pullback that comes after a strong rally last week to a one-year high fueled by the Trump trade euphoria. A weaker dollar makes gold more appealing to buyers in other currencies.

Among other metals, spot silver added 0.1% to USD 31.17, hitting a one-week high earlier in the session. Platinum gained 0.5% to USD 971.66.

Palladium XPD= rose 2.8% to USD 1,032.99, hitting a near two-week high after rising more than 5% on Monday.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Maju Samuel, Shounak Dasgupta and Mohammed Safi Shamsi)