Geopolitical tensions lift gold, but gains hinge on dollar weakness.

Gold Prices Edge Up

On December 26, COMEX gold prices fluctuated upward, closing at $2,653.3 per ounce, a rise of 0.68%. Domestically, SHFE gold night trading prices slightly increased, ending at 621.40 yuan per gram, a gain of 0.30%.

Market analysts point out that recent gold price performance is influenced by multiple factors. The ongoing tension between Russia and Ukraine, with Russia attacking Ukraine's power grid, has spurred risk-aversion sentiments, thereby supporting gold prices. However, the US dollar index remains at a two-year high, and a strong dollar has significantly constrained gold's upward movement.

Mixed Signals from US Economic Data

Data from the US Department of Labor shows that initial jobless claims last week were 219,000, below market expectations, indicating resilience in the labor market. However, continuing claims rose to 1.91 million, the highest in three years, reflecting challenges for some unemployed individuals in finding new jobs.

Additionally, from November 1 to December 24, US retail sales grew by 3.8% year-over-year. Driven by promotional activities during the holiday shopping season, a last-minute shopping surge has clearly boosted market sentiment. This data suggests that the US economy has not yet shown clear signs of recession.

Gold Prices Fluctuate Strongly amid Geopolitics and Dollar Dynamics

Despite the weaker-than-expected US economic data, reduced expectations for Federal Reserve rate cuts, and thin trading during the Christmas holiday, the dollar index remains high, capping gold price increases. However, geopolitical uncertainties, particularly the escalation of the Russia-Ukraine conflict, have bolstered demand for safe-haven assets, providing foundational support for gold prices.

The market anticipates that gold prices will remain in a strong fluctuation mode in the short term, but further increases will require a weakening of the dollar. Future developments in dollar trends and whether geopolitical tensions continue to escalate will have a more profound impact on the gold market.

Amid geopolitical conflicts and global economic uncertainties, gold remains an attractive safe-haven asset, but the strong dollar's influence is unlikely to dissipate soon. Investors should remain cautiously observant.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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