Gold rallies on safe-haven demand, set for best week in nearly 2 years

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Market sees 53% chance of 25 bps US rate cut in Dec – CME
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Bullion is up over 5% for the week so far
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Silver, platinum, and palladium on track for weekly gains
(Updates for market close)
By Sherin Elizabeth Varghese
Nov 22 (Reuters) – Gold prices breached the $2,700 threshold for the first time in over two weeks on Friday, on track for their biggest weekly gain in nearly two years, as safe-haven demand outweighed dollar strength and lower expectations of a U.S. rate cut next month.
Spot gold surged 1.5% at $2,709.24 per ounce by 01:51 p.m. ET (1851 GMT), marking its highest since Nov.6. U.S. gold futures settled 1.4% higher at $2,712.20.
“The escalation in the Russia-Ukraine conflict seems like it’s expanding to a Russia-U.S. war, and that’s definitely boosting short-term safe haven appeal,” said Alex Ebkarian, chief operating officer at Allegiance Gold.
Bullion has gained over 5.7% this week, poised for its best weekly performance since March 2023, when a wave of banking crises roiled global markets and boosted demand for safer assets.
Gold’s surge this week has been propelled by the intensifying Russia-Ukraine crisis, lifting prices more than $170 from last Thursday’s two-month low of $2536.71.
Bullion tends to shine during periods of geopolitical tension, economic risks, and in a low interest rate environment.
Gold’s rise continued on Friday even as the U.S. dollar hit a two-year high and bitcoin reached an all-time peak.
Expectations for a December rate cut from the U.S. Federal Reserve have diminished, with the likelihood now at 53%, a sharp drop from 82.5% just a week earlier.
Some Fed policymakers this week expressed concern that inflation progress may have stalled, advocating for caution, while others emphasized the need for continued rate cuts.
With ongoing policy shifts, and inflation risks from U.S. President-elect Donald Trump’s proposed trade tariffs, gold’s outlook stays strong, with a test of $2,750 expected by mid-December, Ebkarian said.
Spot silver rose 1.5% to $31.24 per ounce, palladium fell 1.4% to $1,015.00, while platinum gained 0.6% to $964.36. All three metals were on track for a weekly rise.
“In our view, the price of platinum in particular should rise significantly, as the market is likely to be in deficit for the third year in a row in 2025,” Commerzbank analysts noted.
(Reporting by Sherin Elizabeth Varghese in Bengaluru, Editing by Christina Fincher and Mohammed Safi Shamsi)