The price of gold has recovered from recent lows as tensions between Russia and Ukraine return.
XAUUSD – Daily Chart
The price of gold has found support at the 2,550 level and made a sharp bounce over the last week.
Gold was falling with the election win by Donald Trump but a move by President Biden to allow long-range missiles to Ukraine. The country immediately fired long-range weapons into Russia and was met with retaliation.
Ukraine suggested an intercontinental ballistic missile (ICBM) was launched against the city of Dnipro, which would be the first use of the weapon designed to avoid air defences and travel thousands of miles. In the UK, drones were spotted above air bases and officials say Russia may attack the UK’s power grid.
There is still almost two months until Donald Trump is officially sworn in as President and there is a risk of escalation ahead of that.
Global gold-backed ETFs extended their inflows to six months, adding US$4.3bn during October. Continued flows and the record-breaking gold price lifted global assets under management (AUM) by a further 5% to another month-end record of US$286bn. Collective holdings rose by 43 tonnes to 3,244 tonnes. North America was again the leader, while Europe remained the only region with outflows.
Year-to-date global gold ETF demand, led by Asia, turned positive for the first time this year. And so far in 2024, inflows into global gold ETFs have reached US$4.7bn. Total assets under management have soared by 33% with all regions except Europe showing ytd inflows.
Gold may see further buying if the risk of war continues to grow and Russia was unhappy with the decision by the current administration to allow long-range weapons.
That could see gold price inflows continuing until Trump is sworn in as President after he said he would stop the war. Russia has given Ukraine a date of January 20 to leave its country.
