Gold prices inch higher as Syria, S.Korea turmoil supports haven demand
2024.12.08 23:49
Investing.com– Gold prices rose slightly in Asian trade on Monday as geopolitical turmoil in Syria and South Korea helped spur some safe haven demand, although a strong dollar limited most gains.
The yellow metal was nursing a muted performance in recent weeks, as increased geopolitical tensions were offset by heightened uncertainty over U.S. interest rates, which saw traders largely favor the dollar and Treasuries.
rose 0.2% to $2,638.77 an ounce, while expiring in February steadied at $2,660.41 an ounce by 23:17 ET (04:17 GMT).
Syria, S.Korea turmoil spurs some gold demand
Buying into the yellow metal was fueled largely by increased haven demand, after rebel forces took over Syria’s capital Damascus and ousted President Bashar al-Assad, who fled to Russia.
Markets were waiting to see just what the regime change could entail after a protracted civil war. The rebel forces were partially backed by Turkey and hold ties to the Sunni Islamic sect, putting them at odds with Iran.
Other reports said Israel had also entered Syrian territory.
In South Korea, a leadership crisis deepened over the weekend as prosecutors named President Yoon Suk Yeol in a criminal investigation over a failed attempt to impose martial law last week.
Yoon survived an impeachment vote over the weekend. But the leader of his own party said the president would be sidelined and forced to eventually step down.
The two points of geopolitical turmoil helped spur some safe haven demand for gold.
But gains in the yellow metal were limited by resilience in the dollar, which firmed before key inflation data due this week.
Markets have largely maintained bets that the Federal Reserve will cut interest rates by 25 basis points next week. But the central bank’s long term outlook on rates has turned uncertain, with sticky inflation and economic resilience likely to elicit a slower pace of easing in 2025.
Other precious metals were mostly weak on Monday. steadied at $935.75 an ounce, while fell 0.5% to $31.442 an ounce.
Copper dented by China disinflation
Among industrial metals, copper prices retreated on Monday as softer-than-expected Chinese inflation data heralded more signs of economic strain in top importer China.
Benchmark on the London Metal Exchange fell 0.2% to $9,082.0 a ton, while February fell 0.3% to $4.1858 a pound.
Chinese consumer inflation shrank more than expected in November, while producer inflation shrank for a 25th consecutive month, amid limited signs of improving economic conditions in the county, despite recent stimulus measures from Beijing.
