Gold prices saw a slight increase in Asian trade on Monday due to escalating geopolitical tensions in Syria and South Korea, leading to some safe haven demand. However, gains were limited by a strong dollar.
As of 23:17 ET (04:17 GMT), gold futures rose 0.2% to $2,638.77 an ounce, while February futures steadied at $2,660.41 an ounce.
Syria, S.Korea Turmoil Spurs Safe Haven Demand for Gold
The rise in gold prices was mainly fueled by increased haven demand as rebel forces took control of Syria’s capital Damascus, leading to the ousting of President Bashar al-Assad. Meanwhile, in South Korea, a leadership crisis deepened, further contributing to safe haven demand for gold.
Despite the geopolitical turmoil, gains in gold were limited by the strength of the dollar, which is expected to firm up before key inflation data is released this week.
Looking at other precious metals, silver steadied at $935.75 an ounce, while platinum fell 0.5% to $31.442 an ounce.
Copper Prices Retreat on Chinese Disinflation
In the industrial metals sector, copper prices saw a decline on Monday following softer-than-expected Chinese inflation data, indicating economic strain in China. Benchmark copper on the London Metal Exchange fell 0.2% to $9,082.0 a ton, while February futures fell 0.3% to $4.1858 a pound.
Chinese consumer inflation decreased more than anticipated in November, with producer inflation shrinking for the 25th consecutive month, reflecting ongoing economic challenges in the country despite recent stimulus efforts.
Analysis:
The recent geopolitical turmoil in Syria and South Korea has led to a slight increase in gold prices as investors seek safe haven assets. However, the overall gains were limited by the strength of the dollar. On the other hand, copper prices retreated due to disappointing Chinese inflation data, indicating ongoing economic struggles in China. These market movements highlight the importance of staying informed about global events and their impact on financial markets to make informed investment decisions.