Gold Rises 1% but Heads for Sharpest Monthly Drop in Over a Year
Gold prices climbed around 1% on Friday, supported by a weaker dollar and ongoing geopolitical issues.
However, the metal was on track for its worst monthly performance since September 2023, driven by a dollar rally this month following Donald Trump’s election victory in the United States.
Spot gold rose 0.9% to $2,664.11 per ounce but was heading for a weekly drop of around 2% after a significant selloff earlier this week. U.S. gold futures also increased by 0.9%, reaching $2,664.50 per ounce.
The bullion has fallen over 3% in November, marking its steepest monthly loss since September 2023. Traders anticipate that higher tariffs under President-elect Donald Trump’s administration could keep interest rates elevated for an extended period.
The dollar index touched its lowest level since November 12 but remains set to gain 2% this month.
XAU/USD has seen a significant rally this year, but we are witnessing a sharp decline this month due to substantial profit-taking after Trump’s victory and the subsequent dollar surge.
Gold is traditionally viewed as a safe-haven asset during periods of economic or political uncertainty, such as trade wars. However, higher interest rates increase the opportunity cost of holding non-yielding bullion.
Geopolitics and Precious Metals
On the geopolitical front, the Israeli military reported on Thursday that several suspects had been spotted in southern Lebanon, describing it as a violation of the ceasefire with Hezbollah. Meanwhile, Russia launched its second major attack this month on Ukraine’s energy infrastructure on the same day.
Among other precious metals, spot silver gained 1.5% to $30.71 per ounce, platinum rose 1.5% to $944.70, and palladium advanced 1.4% to $987.08, although all were headed for monthly losses.
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