The price of gold has increased significantly after Russian forces breached Ukraine last week. This is the metal’s highest price since 2020. This attack is affecting investor risk sentiment across the international markets and has triggered the worst security crisis in the European Union since the Second World War.
The decision to attack Ukraine provoked investor flight to safe haven assets, with spot gold prices rising by almost 1% to reach $1,925.08 per ounce, an almost 15-month high. U.S. gold futures on the Comex also gained 1% to hit $1,930 per ounce.
Last week, President Vladimir Putin of Russia made a vow to demilitarize Ukraine and replace the country’s leaders. The West responded to this by threatening additional sanctions on Russia, with U.S. President Joe Biden also announcing that he would institute further consequences on Russia after referring to the country’s move to invade Ukraine as an unjustified and unprovoked attack.
In an interview, a senior precious metals trader at Heraeus Metals Germany GmbH & Company, Alexander Zumpfe, stated that Russia’s invasion of Ukraine had pushed the global markets into panic mode, explaining that investors were axing shares from their portfolios in favor of safe haven assets. This has been observed with precious metals rallying as European stocks and U.S. futures tumble. Gold hit a new high in almost two years, with euro-priced bullion also recording new highs. Even the dollar strengthened in value.
Even before the invasion, the price of gold had been increasing as the intensity of the standoff between Russia and the West grew. This trend has helped offset headwinds, including policy tightening by the U.S. Federal Reserve, which many had been expected to impact the metal’s performance negatively.
Analysts are now focused on examining the markets before determining new price forecasts for 2022. In a recent report, Bob Haberkorn, who is a senior market strategist at RJO Futures, stated that these changes were more than what the market had expected. Haberkorn added that if Moscow took Kiev, the capital city of Ukraine, and the global community had an aggressive response as a result, the price of gold would surpass $2,000 rather quickly.
Natixis SA senior commodities analyst Bernard Dahdah stated in a separate report that the price of gold was expected to go beyond $2,000 per ounce in the next few days if the conflict between Russia and Ukraine continued escalating, noting that a correction would occur once the intensity of this conflict diminished.
Before that correction occurs, precious metals companies such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are likely to enjoy higher revenues from the hike in the price of the safe haven commodity.
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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