Gold Surges as Dollar Weakens Amid Rising Oil Prices
Gold prices surged more than 1.4% on Wednesday, reclaiming the $4,400 per ounce level, as investors sought safe-haven assets amidst a weaker U.S. dollar and rising oil prices.
The US Dollar Index hovered near two-week lows, making gold relatively cheaper for investors holding other currencies and boosting demand for the precious metal.
Oil prices broke above $100 per barrel, driven by international tensions and supply chain disruptions, which fueled inflationary pressure and pushed bond yields higher.
Rising yields typically diminish the appeal of non-yielding assets like gold, yet spot gold rose 1.4% to $4,414.30 per ounce, while U.S. December gold futures gained 0.5% to settle at $4,458.80 per ounce.
Analysts noted that tight physical supply and safe-haven demand provide support for the gold market, making a large-scale sell-off unlikely.