On Friday (November 29) in the Asian early trading session, spot gold experienced slight fluctuations and is currently trading around $2638.91 per ounce. Driven by geopolitical tensions, gold prices rose slightly by 0.07% on Thursday, closing at $2637.60 per ounce. Despite the mild rebound of the US dollar, the increased global risk aversion provided support for gold. Due to the Thanksgiving holiday in the US, the market saw light trading, and Thursday's gold candlestick recorded a doji.
Geopolitical Escalation: Russia-Ukraine Conflict Continues
The conflict between Russia and Ukraine has further escalated. On Thursday, Russia launched a second large-scale attack this month on Ukrainian energy facilities, causing severe blackouts nationwide. According to Ukrainian Air Force statistics, Russia fired a total of 91 missiles and 97 drones, with 12 missiles hitting targets, mostly energy and fuel facilities. Ukraine claimed to have intercepted 79 missiles and 35 unmanned aerial vehicles.
Russian President Putin stated that the attack was in response to Ukraine's use of American ATACMS ballistic missiles. Putin also mentioned the potential future use of the new Oreshnik hypersonic missile to target Ukraine's "decision-making centers," including military facilities, defense industry enterprises, and even government departments in Kyiv. Ukrainian President Zelensky condemned Putin's statements, considering them an attempt to undermine efforts to end the war.
Middle East Tension: Israel and Hezbollah Ceasefire at Risk
In the Middle East, the ceasefire agreement between Israel and Lebanon's Hezbollah faces challenges. Although the agreement took effect on Wednesday, both sides accused each other of violating the ceasefire on Thursday. Israeli tanks attacked six areas in southern Lebanon, claiming that suspicious activities threatening Israeli security were discovered. The Lebanese military, on the other hand, accused Israel of multiple violations of the agreement, including aerial intrusion and artillery targeting Lebanese territory.
Israeli Prime Minister Netanyahu stated that he has instructed the military to be prepared for combat in response to a possible breakdown of the ceasefire agreement.
Gold Prices Influenced by Multiple Factors
With the ongoing Russia-Ukraine war and rising tensions in the Middle East, geopolitical risks have heightened market risk aversion, providing support for gold prices. Additionally, the tariff plan announced by US President-elect Trump has further increased market uncertainty. Analysts believe that Trump's tariff policy could potentially drive inflation, thereby affecting the Federal Reserve's pace of future interest rate cuts.
Currently, the market estimates a 62.8% probability of a 25 basis point interest rate cut by the Federal Reserve in December, down from 66% the previous day. If rate cuts are delayed, it could bolster the US dollar while limiting the potential for gold price increases.
On Thursday, the US dollar index moderately rebounded, rising at one point by 0.3% to 106.42, closing at 106.16. Despite recent fluctuations, the rebound of the dollar poses some pressure on gold bulls.
Market participants will closely monitor geopolitical developments and Federal Reserve policy directions in the coming weeks, which will determine the short to medium-term performance of gold prices.
