Gold remained steady after its sharpest rise in 20 months last week, fuelled by increased demand for safe-haven assets due to the ongoing escalation of the Russia-Ukraine war. Trading close to US$2,720 per ounce, gold surged by 6% last week as the conflict took a more dangerous turn. Russian President Vladimir Putin indicated that his forces might use a new missile in retaliation for Ukraine's use of American and UK-made weapons on Russian soil.

The precious metal also found support from a weaker US dollar, which dropped on Monday following President-elect Donald Trump's nomination of Scott Bessent to oversee the US Treasury. The hedge fund manager is expected to adopt a more gradual approach to tariffs, leading to a softer US currency that makes gold cheaper for buyers in other currencies.

While gold fell sharply after Trump's election victory due to the strong dollar, it has since recovered most of those losses and is up more than 30% this year. The rally is being driven by robust central bank purchases, continued haven demand, and Federal Reserve rate cuts. Both Goldman Sachs and UBS Group have forecast that gold will continue to rise in the coming year.

Spot gold saw a 0.1% increase to $2,719.30 an ounce at 8:14 am in Singapore, while silver remained steady. Platinum and palladium both saw gains. The market is also eyeing a range of economic data this week, including the Federal Reserve's November meeting minutes, consumer confidence figures, and personal consumption expenditure (PCE) data, which is the Fed's preferred measure of inflation, for further clues about the central bank's likely rate path.

Bloomberg