As usual, bad news for the world has proved to be good news for the price of gold.
At the time of publication, the spot price of the yellow metal had soared past the $1,900- per-ounce benchmark to hit $1,903—the result, analysts said, of the Russia-Ukraine crisis setting the world on edge.
By contrast, at the beginning of February, gold was trading around $1,800.
Yet since the Ukraine crisis began heating up, the yellow metal has risen, spending the last few days hovering around the $1,900 benchmark. Overnight, it hit $1,913 an ounce in Asian markets, according to BullionVault, before settling down again. Overall, gold is trading at its highest price since May 2021.
Analysts said that investors often flock to yellow metal in times of turmoil.
“It’s not surprising to see gold well supported in this environment given its traditional safe-haven play,” David Meger, director of metals trading at brokerage High Ridge Futures, told Reuters.
He noted that gold’s recent rise has come in spite of the Federal Reserve’s decision to raise interest rates, the kind of anti-inflationary move that tends to send gold prices heading downward.
Because of the larger environment, most analysts believe the current gold rally won’t have much staying power, though a lot depends on how long the current crisis lasts, and how bad things get.
“An environment where real rates are rising and the Fed is tightening policy does provide a negative backdrop for gold,” Joni Teves, precious metal strategist for Swiss investment bank UBS, told CNBC. “We do think that the strength should ultimately…be short-lived.”
The ongoing crisis also may boost the price of platinum, analysts said, as Russia is a key producer of that metal. At press time, platinum was trading at $1,089 per ounce.
Gold broke the $2,000-an-ounce barrier for the first time ever in August 2020. The yellow metal eventual soared to an all-time record of $2,067 an ounce, before heading back down again.
(Photo: Getty Images)
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