Gold Prices Surge on Ukraine Crisis, Hitting 7-Year High
*International Gold News*
Gold prices have soared to their highest level in seven years on Tuesday, March 8th, 2022, as investors seek safe havens amid escalating tensions between Russia and Ukraine.
Key Drivers of the Gold Rally:
* Ukraine Conflict: The ongoing military conflict in Ukraine has sparked fears of a wider war, prompting investors to flock to traditional safe-haven assets like gold.
* Inflation Concerns: Rising inflation due to supply chain disruptions and energy price spikes is also supporting gold prices. Gold is considered an inflation hedge, as its value tends to increase when the cost of living rises.
* Geopolitical Uncertainty: The broader geopolitical uncertainty surrounding the Russia-Ukraine conflict and its potential impact on the global economy is adding to the demand for gold.
Technical Analysis:
On Tuesday, gold futures for April delivery (GCJ2) reached $2,078.80 per ounce, the highest level since August 2011. The precious metal has been trading above its 200-day moving average, a technical indicator that suggests an uptrend.
Expert Commentary:
“Uncertainty is driving this rally in gold,” said David Meger, director of metals trading at High Ridge Futures. “The Ukraine crisis is putting a flight-to-safety premium into gold because it’s the ultimate safe haven.”
“The inflationary aspect is also supportive,” added Meger. “We’re seeing inflation pressures really starting to take hold.”
Outlook:
Analysts expect gold prices to remain elevated in the near term as the Ukraine conflict continues and geopolitical uncertainty persists. However, some analysts caution that a diplomatic resolution or a de-escalation of tensions could lead to a pullback in gold prices.
“Gold is likely to stay elevated until we get some resolution to the Ukraine situation,” said Michael Matousek, head trader at U.S. Global Investors. “But if we start to see any kind of positive developments, then I think gold could come down.”
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