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Gold edges higher on Wednesday due to safe-haven flows from continued geopolitical tensions.  Upside is capped due to stronger USD amid less dovish interest rate expectations in the US. XAU/USD starts a new short-term uptrend on the 4-hour chart.  Gold (XAU/USD) recovers after a weak start to trade in the $2,640s during the US session on Wednesday as geopolitical tensions in the Ukraine theatre of war ratchet up and drive fresh safe-haven flows into the precious metal. Gold had a weak start due mostly to the effect of a stronger US Dollar (USD), and since Gold is mainly priced and traded in USD, this automatically has the effect of lowering its price, all other things being equal.  Gold stalls in the middle of recovery  Gold recovered over $100 in value from eight-week lows in the $2,540s at the beginning of the week as a result of increased safe-haven flows. This came on the back of a ratcheting up of geopolitical tensions after Russia amended its conditions for using its nuclear armaments. The move was interpreted as a warning to Ukraine and its allies following the decision of US President Joe Biden to allow Ukraine to use US-made long-range ATACMS (Army Tactical Missile System) missiles to strike targets in Russia.  US Dollar on the rise  Gold trades higher on Wednesday but it had a weak start due to a strengthening US Dollar. The Greenback is seeing gains as markets price in a lower probability – of now around 60% – of the Federal Reserve (Fed) cutting interest rates in December. Previously, markets had been 100% sure the Fed would go ahead with at least a 25 basis point (bps) (0.25%) rate cut. However, since President-elect Donald Trump won the US presidential election – and due to recently robust US macroeconomic data – the probabilities have steadily fallen. The…

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Filed under: News - @ November 20, 2024 6:25 pm