Investing.com– Gold prices rose on Friday, taking advantage of a weaker dollar as traders bet on a December interest rate cut, while increased geopolitical tensions also pushed up haven demand.

The yellow metal was nursing some losses for the week after the announcement of an Israel-Hezbollah ceasefire. But heightened tensions between Russia and Ukraine saw prices trim some weekly losses on Thursday and Friday.

rose 0.6% to $2,659.14 an ounce, while expiring in February rose 0.7% to $2,683.79 an ounce by 1:24 ET (1824 GMT). 

Russia-Ukraine tensions stoke safe haven demand 

Russia launched its second major strike on Ukraine’s energy infrastructure this week, and also threatened to attack areas in Kyiv with advanced ballistic missiles.

Moscow’s offensive came in response to Ukraine’s use of Western-made, long-range missiles against Russia, which the latter warned would mark a dire escalation in the conflict.

Russia had earlier in November also lowered its threshold for nuclear retaliation. 

In the Middle East, doubts emerged over a recent Israel-Hezbollah ceasefire after the two accused each other of violating the truce. 

Softer dollar buoys gold as markets bet on Dec rate cut 

Gains in gold were also furthered by a drop in the dollar, as markets maintained expectations that the Federal Reserve will still cut interest rates in December.

Traders were seen betting on a 68.6% chance the Fed will cut rates by 25 basis points, and a 31.4% chance rates will remain unchanged, showed. 

Bets on a December cut persisted even as recent data showed resilience in U.S. inflation, while Fed officials supported a gradual easing in rates. 

The fell sharply this week, also giving up some gains made in the wake of Donald Trump’s election win earlier this month. 

But the long-term outlook for U.S. interest rates is uncertain, given that inflation remains well above the Fed’s 2% target. Expansionary policies under Trump are also expected to underpin inflation and rates. 

A slew of Fed officials, including , are set to give addresses next week, before December’s rate decision.

Broader metal prices rose on Friday, tracking a softer dollar. rose 2.5% to $954.80 an ounce, while rose 1.8% to $31.102 an ounce. 

Among industrial metals, benchmark on the London Metal Exchange rose 0.3% to $9,020.50 a ton, while February steadied at $4.1427 a pound.

Copper markets were awaiting from top importer China, due on Saturday. The reading is expected to show a pick-up in activity after Beijing rolled out a slew of bumper stimulus measures in the past two months. 

(Ambar Warrick contributed to this article)