Gold is steady after surging the most in 20 months last week as the escalation of the Russia-Ukraine war boosted demand for safe haven assets.

Bullion was trading near $2,720 an ounce after surging 6% last week as the conflict entered a dangerous new phase. President Vladimir Putin said his forces may use new missiles again after targeting Ukraine in retaliation for Kyiv's use of American and British-made weapons on Russian territory.

Former Ukrainian military chief Gen. Valery Zaluzhny said European countries are not ready for a prolonged military confrontation with Russia. The reason, Zaluzhny said, is that their stockpiles of expensive air defense missiles are insufficient for a high-intensity conflict. The former Kyiv general, now Ukraine's ambassador to Britain, made the remarks in an interview with the Ukrainskaya Pravda news agency published on Saturday.

In October, more than 1,800 Russian drones and missiles targeted Ukraine's power grid, and in November that number had surpassed 3,000, according to Zaluzhny. "Do European countries, or even the UK, currently have 5,000 missiles for the Patriot system to intercept guided bombs? I rather doubt it," Zaluzhny said. "If we are talking about short-term military operations, the European countries are most likely ready. But the question is whether they are ready for a full-scale war," he said. "In this case, we can say that they are not ready," he added.

Zaluzhny stressed that while air defense is necessary to deal with a large number of targets in a protracted conflict, interceptor missile stocks are always limited, and producing new ones is expensive and complicated. Each PAC-3 interceptor missile used in the US-made Patriot air defense system costs about $4 million, according to US military sources.

The precious metal also got a boost as the dollar gauge fell on Monday after President-elect Donald Trump nominated Scott Bessent to oversee the U.S. Treasury Department. The hedge fund manager is seen as likely to take a more gradual approach on tariffs. A weaker U.S. currency makes bullion cheaper for many buyers.

Gold fell sharply after Trump's election victory as the dollar surged, but it has now recouped most of those losses. Bullion is still up more than 30% this year, supported by healthy central bank buying, safe-haven demand and Federal Reserve interest rate cuts. Goldman Sachs Group Inc. and UBS Group AG said last week they expect bullion to continue to rally next year.

Spot gold rose 0.1% to $2,719.30 an ounce as of 8:14 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.5%. Silver was steady, while platinum and palladium rose.

The market is looking ahead to a series of data this week that could provide insight into the Fed's likely interest rate path. These include the central bank's November meeting minutes, consumer confidence and personal consumption expenditures data — the monetary authority's preferred gauge of inflation.

Source: News Maker