Concerns about the prolonged war in Ukraine and rising inflation are leading investors to buy gold more and more frequently. They believe that this precious metal still serves well as a safe haven in uncertain times.
Gold is attracting investors again
The gold price was still below $1,800 per troy ounce at the beginning of December last year. However, with rising tensions on the Russian-Ukrainian border and rising inflation in both the US and the European Union, gold has begun to attract investor interest again. When Russian troops invaded Ukraine on February 24, gold began to strengthen rapidly, and its price climbed slightly above $2,050 per troy ounce.
The impact of the war on the economy
After that, its price dropped, but it was still between 1930 and 1950 dollars. In recent days, however, it has started to rise again and earlier this week the troy ounce was trading near the $2,000 mark. That’s practically where it’s still holding. Investors are assessing the risks of the ongoing war in Ukraine, which is spilling over into accelerating inflation in central and western Europe. Moreover, the likelihood that the European and much of the world economy will fall into stagflation this year, with prices rising even as economic performance stagnates or declines slightly, is increasing.
