The precious metal gold held an 18 -month high on Tuesday amid rising risks in the market as a result of Russia’s attack on Ukraine.
Many Western countries are considering and have imposed various heavy sanctions on Russia and the affected commodities have seen a very large surge. These include oil, gas, copper and gold.
But in reality, gold is rising as a safe-haven and hedge to inflation. The deteriorating situation between Russia and Ukraine as well as other Western countries has prompted concerns of high inflation and hurt the global economy following sanctions imposed on Moscow.
Following these concerns, gold has risen to $ 2,000 per ounce for the first time since August 2020 in early Monday trading and remained traded higher in today’s Asian session around $ 1,985 per ounce.
The strengthening of gold prices, however, was slightly stunted by the strength of the US dollar which also benefited from market uncertainty and optimistic investors ahead of the FOMC policy meeting next week.
Meanwhile, investors are now first awaiting the US consumer price index (CPI) data to be released on Thursday and the market expects the key annual inflation rate to rise 7.8%.
