Gold prices scale $2,700 highs as safe-haven bid offsets stronger dollar

Gold prices jumped above the $2,700 mark Wednesday as geopolitical instability in Asia and the Middle East underpinned safe haven demand offsetting a firmer dollar.

Among industrial metals, copper prices rose sharply on sustained optimism over more stimulus measures in top importer China. Encouraging copper import data from the country also aided sentiment.

Spot gold rose 1% at $2,753.69 an ounce, while gold futures expiring in February rose 1.3% to $2,754.05 an ounce by 4:52 p.m. ET (21:52 GMT). China-Taiwan, Syria tensions spur haven demand

Gold gains this week came amid increased geopolitical tensions in the Middle East, after rebels overthrew the Syrian government. Markets were waiting to see just what this would entail for the region, given that it potentially loosens Iran’s hold in the Middle East.

In Asia, Taiwan raised an alert after China allegedly engaged in its largest maritime movements around the island in decades. China was seen sending about 90 ships in reported war drills around Taiwan.

Political instability in South Korea also remained in focus, with President Yoon Suk Yeol facing criminal charges over a failed attempt to impose martial law last week. Dollar firms despite in-line CPI data cementing bets on Fed rate cut next week

The dollar did firmed even as in-line inflation data cementing expectations for U.S. rate cut next week.

The Labor Department's consumer price index (CPI) rose by 2.7% last month, accelerating slightly from 2.6% in October, while stripping out more volatile items like food and fuel, the "core" number climbed by 3.3% in the twelve months to July, also in line with expectations.

"In our view, this is a favorable report for the Fed," Morgan Stanley (NYSE:MS ), backing a 25bps rate cut next week the Fed's December 17-18 meeting.

Other precious metals were mixed. Platinum futures rose 0.2% to $951.00 an ounce, while silver futures fell 0.1% to $32.790 an ounce. Copper falls despite on China cheer; CEWC in focus

Benchmark copper futures on the London Metal Exchange fell 0.7% to $9,180.00 a ton, while February copper futures fell 0.3% to $4.2613 a pound.

The red metal firmed sharply this week after top importer China vowed to loosen monetary policy and dole out targeted fiscal measures to boost economic growth.

Focus is now on China’s Central Economic Work Conference, which begins on Wednesday and is likely to set the economic agenda for 2025, including Beijing’s plans for stimulus.

Data showing a sharp increase in Chinese copper imports through November also aided sentiment.

Source: Investing.com