Gold prices maintained their two-day rally, as demand for safe-haven assets increased after escalating tensions in Russia's war against Ukraine.
Bullion traded above $2,638 an ounce after rising more than 2% in the first two days of the week. Gold rose on Tuesday, along with U.S. Treasuries, after President Vladimir Putin endorsed an updated version of Russia’s nuclear doctrine, which expanded the terms for using atomic weapons. Ukraine launched its first U.S. missile strikes on targets in Russia.
Investors typically seek safety in the precious metal during times of geopolitical and economic uncertainty.
Gold's strength this week also helped push the US dollar lower, paring some of the strong gains the currency had made in the wake of Donald Trump's presidential election victory.
Gold has risen more than 25% this year, with gains supported by central bank buying, the Federal Reserve’s dovish monetary stance and geopolitical tensions in Europe and the Middle East. Goldman Sachs expects the metal to continue its rally to $3,000 an ounce next year.
Spot gold rose 0.2% to $2,638.51 an ounce at 8:35 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1%, after falling about 1% in the previous three sessions. Silver prices rose, while palladium fell and platinum was flat.
