Investing.com– Gold prices rose in Asian trade on Thursday as heightened tensions between Russia and Ukraine underpinned safe haven demand, helping bullion weather strength in the dollar.

Gold rose for a fourth consecutive session, extending a rebound from over two-month lows. But the yellow metal’s pace of gains now appeared to be slowing amid pressure from the dollar, as traders second-guessed expectations for lower U.S. interest rates. 

rose 0.2% to $2,656.84 an ounce, while expiring in December rose 0.3% to $2,659.15 an ounce by 00:00 ET (05:00 GMT). 

Russia-Ukraine tensions support gold demand 

The yellow metal was underpinned by higher safe haven demand in the face of increased tensions between Russia and Ukraine, after the U.S. authorized the use of long-range missiles by Kyiv.

Russia had responded by lowering its threshold for nuclear retaliation, and warned of a dire escalation in the conflict over the U.S. move. Ukraine launched a series of missile strikes against Russian territories this week, using Western-made weapons. 

Fears of an escalation in the conflict drove traders towards gold, helping the yellow metal recover after it plummeted from record highs over the past two weeks.

Dollar, yield strength limits gold recovery 

Gold was nursing steep losses in the past two weeks as risk appetite was initially boosted by Donald Trump winning the 2024 presidential election.

Trump’s victory also saw traders pricing in the prospect of higher U.S. interest rates in the long term, which supported the and Treasury yields. The greenback traded just below a one-year high on Thursday.

Uncertainty over U.S. interest rates was furthered by sticky inflation data released last week, while the Federal Reserve struck a less dovish tone in recent addresses. 

Traders were seen scaling back expectations for a December rate cut. 

showed traders pricing in a 57.3% chance for a 25 basis point cut in December, compared to a 85.7% chance seen last week. Bets on a hold rose to 42.7% from 14.3% a week ago.

This notion pressured gold, given that higher rates increase the opportunity cost of investing in the yellow metal.

Other precious metals rose on Thursday but were also nursing losses over the past two weeks. rose 0.4% to $970.35 an ounce, while rose 0.7% to $31.225 an ounce. 

Among industrial metals, benchmark on the London Metal Exchange rose 0.2% to $9,109.50 a ton, while December fell 0.2% to $4.1442 a pound.

Copper prices were walloped by increased concerns over slowing Chinese demand, especially as recent stimulus measures and economic readings from the country underwhelmed.