Investing.com - Gold extended gains from the prior session on Wednesday, as mounting geopolitical concerns between Russia and NATO member Turkey boosted safe haven demand for the precious metal.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $1.40, or 0.13%, to trade at $1,075.20 a troy ounce during European morning hours. A day earlier, prices rose $7.00, or 0.66%.
Turkish fighter jets shot down a Russian warplane near the Syrian border after it violated Turkey's airspace on Tuesday. However, Russia's defense ministry rejected those claims, saying the plane had been attacked when it was in Syrian airspace.
Responding to the incident, Russian President Vladimir Putin called the downing "a stab in the back," and warned it would have serious consequences for the Russian-Turkish relationship.
Investors often buy gold as refuge against geopolitical uncertainty.
Despite Tuesday's gains, prices of the precious metal remained not far above five-and-a-half-year lows hit last week amid mounting expectations the Federal Reserve will raise rates for the first time in nearly a decade at its December 15-16 meeting.
Ahead of the Thanksgiving holiday on Thursday, a flurry of U.S. economic data will be released later in the session, including weekly jobless claims figures, durable goods orders, personal spending and new home sales.
Data released Tuesday showed that the U.S. economy grew more than initially estimated in the third quarter, supporting the case for a rate hike next month.
Most Fed officials believe there is a strong case to begin raising interest rates at the central bank's mid-December meeting, as long as U.S. economic data does not disappoint in the coming weeks.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar pulled back slightly from an eight-month high against a basket of six other major currencies, as investors locked in profits from the greenback's recent rally ahead of the Thanksgiving holiday on Thursday.
U.S. markets will be closed Thursday for the Thanksgiving holiday and Friday will be a half day.
Meanwhile, silver futures for December delivery dipped 3.9 cents, or 0.28%, to trade at $14.12 a troy ounce. Prices hit $13.85 earlier this week, the weakest since August 2009.
Elsewhere in metals trading, copper declined on Wednesday, as traders booked profits from the previous session's sharp rally, which came on the back of a weaker dollar.
Despite Tuesday's rally, prices of the red metal remain not far above six-year lows hit earlier this week as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.
Copper is down more than 10% so far this month as fears of a China-led global economic slowdown and a stronger greenback slammed commodities.