Gold shines in the face of nuclear threat

22. Nov.

Gold (Ticker AT: GOLD) has surpassed $2,688.70 per ounce, while December maturity futures rose to $2,690.70 per ounce, marking a 5% rise for the week, consolidating five consecutive sessions higher.

Since the Asian day, gold has continued the momentum started on the 20th. Gold is currently in a highly volatile situation and the Fed's cuts would have been reason enough to have reflected the fall to the support of 2,536 dollars. On this day the value seems to be highly overbought, marking an RSI at 83.83% at mid-session. It would not be unusual for the stock to correct towards $2,685.50 to support its rise again towards $2,740 in the area of the checkpoint (POC) to seek the price again at highs and towards the upper part of the channel around $2850-$2900.

1. Gold as a safe haven in times of geopolitical tension
The price of gold has experienced a remarkable rise in Asian markets this Friday, positioning itself to close the week with significant gains. This upward movement has been driven mainly by rising tensions between Russia and Ukraine, which led investors to seek safe-haven assets such as the yellow metal. Moscow has intensified its nuclear threats in response to Ukraine's use of long-range missiles, which has increased the perception of geopolitical risk in the markets.

2. Resistance to the strong dollar and bond yields
Despite the strengthening dollar, which rose to a 13-month high due to uncertainty over interest rate cuts by the Federal Reserve, gold has shown remarkable resilience. Higher Treasury yields have pressured the metal, but growing demand for safe-haven assets has outweighed these adverse forces.
The outlook in the U.S. has also played a role, as markets anticipate more expansionary economic policies under President Donald Trump, which could keep the dollar at elevated levels.

3. Performance of other precious and industrial metals
While gold has led the weekly gains among precious metals, platinum and silver have posted slight increases. In contrast, industrial metals, such as copper, have faced significant pressures. Copper futures have remained near one-and-a-half month lows, affected by the lack of sufficient stimulus in China, the main importer of this metal.
• London copper: 9,011.50 dollars per ton (-0.3%).
• December copper futures: 4.0915 dollars per pound (-0.5%).

4. Outlook for gold and metals
With the war in Eastern Europe escalating and economic uncertainty on the rise, gold is expected to maintain its safe-haven appeal. However, markets will be watching global monetary policy decisions and key economic data that could influence its medium-term trajectory.
Ion Jauregui - ActivTrades Analyst





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