Gold continues to play a key role in the global economy, first in the fight against inflation and now in Russia’s invasion of Ukraine.
The metal fell by the biggest margin in seven months amid a large selloff in commodities after a top Ukrainian official said the country could discuss the issue of neutrality with Russia if certain guarantees are met.
Gold sank as much as 3.6% on the news, the largest single-day dip since early August. Bullion is still up almost 9% this year as investors seek insulation against an inflationary shock to the global economy.
Spot gold was down 2.6% at $1,997.79 an ounce by 4:21 pm in New York. Prices touched $2,070.44 on Tuesday, just $5 short of an all-time high reached in August 2020.
Holdings in gold-backed exchange-traded funds (ETF) have reached the highest in a year, with inflows of about 152 tons in 2022, according to initial data compiled by Bloomberg.
What does this mean for me?
The impact of the war in Ukraine and sanctions on Russia has had a major impact on the global economy.
Commodity prices have risen as investors are worried about emerging supply blockages. The move by the US to ban Russian oil and the UK to phase out Russian crude imports by year’s end has led to further fears about inflation.
Through all this, investors continue to see gold as a safe bet during troubled times. For commodities traders, this vote of confidence in gold can inform portfolio choices.
Contact Us and your Message Will Be Answered As Soon As Possible.