Gold rose to a nine-month high of $1,915 on Tuesday as tensions escalated in Eastern Europe after Russia sent troops into separatist regions of eastern Ukraine. At the time of writing, spot gold was trading at $1,903.6, up 0.28% on a daily basis. Commerzbank strategists expect gold to gain more as the situation in Ukraine becomes more and more worrying.
“Due to increased risk aversion, the price of gold could rise further”
The escalating Ukraine crisis supported safe-haven flows into the yellow metal as investors focused on inflationary risks and tighter monetary policies from central banks. Thanks to this, the precious metal quickly passed the $1,800 levels it had been circulating for a long time, and took a breather above $1,900. Commerzbank strategists predict that gold as a safe-haven will see greater demand, which will push prices higher:
We believe that if the Ukraine crisis escalates further, gold will see greater demand due to increased risk aversion. This means that the gold price will likely make more profits.
Commerzbank strategists assess that the precious metal has succeeded in attracting capital away from risky assets, profiting from their decline, while its rise is capped by another safe-haven dollar:
The yellow metal is gaining from the significant drop in stock markets and bond yields. Both are indicators of high risk aversion. Likewise, the strong US dollar, seen as a safe haven, is likely to prevent a sharper rise in gold prices.
As it is known, historically, yellow metal plays an important role in hedging against the uncertainty caused by economic shocks and geopolitical problems. Therefore, the price of gold generally tends to rise during these periods. For example, the price of gold increased by around 25%, performing quite well in 2020, when the pandemic led to a sharp decline in stocks and commodity prices.
With this, cryptocoin.com As we reported, the gold price decreased by 3.6% in 2021, as the global economic conditions improved with the recession of the pandemic and the liquidity pumped by the central banks directed towards the stock and crypto markets. Now, the precious metal is trying to navigate between rising geopolitical tensions and rising interest rates to combat inflation.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, asset or service in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.