Gold prices rose over 1% to hit a two-week peak on Friday, heading for the best weekly performance in more than a year, buoyed by safe-haven demand as Russia-Ukraine tensions intensified.
Spot gold jumped 1.3% to $2,703.05 per ounce as of 1245 GMT, hitting its highest since Nov. 8. US gold futures gained 1.1% to $2,705.30.
Bullion rose despite the US dollar hitting a 13-month high, while bitcoin hit a record peak and neared the $100,000 level.
"With both gold and USD (US dollar) rising, it seems that safe-haven demand is lifting both assets," said UBS analyst Giovanni Staunovo.
Ukraine's military said its drones struck four oil refineries, radar stations and other military installations in Russia, Reuters reported.
Gold has gained over 5% so far this week, its best weekly performance since October 2023. Prices have gained around $173 after slipping to a two-month low last week.
"We understand that the price setback has been used by 'Western world' investors under-allocated to gold to build exposure considering the geopolitical risks that are still around. So we continue to expect gold to rise further over the coming months," Staunovo said.
Bullion tends to shine during geopolitical tensions, economic risks, and a low interest rate environment. Markets are pricing in a 59.4% chance of a 25-basis-points cut at the Fed's December meeting, per the CME Fedwatch tool.
However, "if Fed skips or pauses its rate cut in December, that will be negative for gold prices and we could see some pullback," said Soni Kumari, a commodity strategist at ANZ.
The Chicago Federal Reserve president reiterated his support for further US interest rate cuts on Thursday.
On Friday, spot silver rose 1.8% to $31.34 per ounce, platinum eased 0.1% to $960.13 and palladium fell 0.6% to $1,023.55. All three metals were on track for a weekly rise.
