Gold – Time to Shine?

Gold is traditionally considered a hedge against political risks and inflation. This week, as the conflict between Russia and Ukraine mounts and US inflation continues to soar, investors turned their attention to the safe-haven asset. Gold prices jumped to the highest level since June 2022 on Tuesday, and on Thursday, Gold prices surged to a 15-month peak. In February alone, gold prices have climbed by five percent.

Escalating Geopolitical Tensions

The most recent Russia–Ukraine conflict began in November 2021 when satellite images showed that Russian troops have been amassing on the border with Ukraine. Things have escalated further this week. Stay tuned to the latest financial news

Russian President Putin made a speech on Monday saying that Russia would recognize the independence of two territories in Ukraine which was currently under the control of the Moscow-backed separatists. This could potentially pave the ways for an invasion as those separatist regions could seek military support from Russia. Gold climbed 7 dollars to $1,905 an ounce.

Ukraine declared a nationwide state of emergency, which will last for 30 days on Wednesday. Gold retreated $1,898 an ounce. Check the latest gold price

On Thursday, Putin announced that he would carry out a “special military operation” in Ukraine on live. Prior to this, he has been denying any potential attack on Ukraine. The US believed a full-scale invasion of Ukraine is imminent. Gold prices hit the highest level in over a year.

A Mixed Outlook

Despite the surging inflation and the geopolitical situation, analysts at UBS considered the gold surge is short-lived because of the upcoming interest rate hikes.

“We keep a negative view on gold and silver, which we think are likely to face downward price pressure amid higher US interest rates and a stronger USD,” UBS wrote in a statement.

On the other hand, Goldman Sachs analysts said gold could hit above $2,000 this year.

This article is prepared by Lucia Han from Mitrade and is for reference only. We do not represent that the material provided here is accurate, current or complete. The article content neither takes into account your personal investment objects nor your financial situation, and therefore it should not be relied upon as such. You should seek for your own advice.