The price of gold has continued to thrive over the few days due to the protracted imminent Russian invasion of Ukraine. Gold has reportedly shown an intraday surge from its 8-month high recorded earlier today (15/02/2022) and subsequently dived beneath the $1,860 mark earlier during the European session (Panchal, 2022). The recent decline in the price of gold came about following the gradual withdrawal of Russian troops from the Ukrainian border and back to their military bases. Myriad NEWS headlines covering this supposed retreat of the Russian Federation’s military troops from the Ukrainian border quelled the much-felt worries and panic about the Kremlin’s imminent Ukrainian invasion (Panchal, 2022). However, the absence of an imminent confrontation between Kyiv and the Kremlin has eased investor tensions, pinpointing the future dipping of the price of XAU in the market.
Geopolitical Changes as agents of change in the price of Gold
Precious metals, such as gold and silver, are used as ‘safe haven’ hedges against geopolitical threats and risks like the erstwhile Russian invasion of Ukraine. Precious metals tend to produce positive outcomes in the market during geopolitical threats of war and invasion. Nonetheless, rising inflation has further presented an added advantage for the status of gold because it set the stage for its use as a preferable hedge against imminent inflation (Panchal, 2022). Any further decline in the price of gold, however, presents a potential opportunity for buying more of this safe-haven asset (XAU) as it is more poised to remain at the $1,848 – $1,850 mark (“Gold Spot US Dollar (XAU USD) News,” 2022). As it now stands, it behooves current and future stock market traders and or investors to assess future geopolitical developments keenly. Future developments in the geopolitical framework still hold a greater influence in driving forth the global risk sentiment of investment.
References
Gold spot US dollar (XAU USD) news. (2022, February 15). Investing.com. https://www.investing.com/currencies/xau-usd-news
Panchal, A. (2022, February 15). Gold price forecast: XAU/USD corrects sharply from multi-month high amid easing Russia-Ukraine tensions. FXStreet. https://www.fxstreet.com/news/gold-price-forecast-xau-usd-approaches-1-900-on-softer-yields-russia-linked-fears-202202150543
