As of Thursday morning, gold prices were up $100 per ounce. They blasted through that $3,300 ceiling after having sunk earlier in the day to below $3,275 — between $3,275 and $3,274. This uptick is indicative of an increased demand for safe-haven assets due to increasing geopolitical tensions across the world.
Geopolitical risks feeding from several ongoing conflicts have added an attractive layer to gold’s traditional status as a go-to safe-haven asset. The still-played out Russia-Ukraine war, causing shock and awe in Eastern Europe, helps boost gold prices. Similarly, rising tensions in the Middle East and ongoing disputes along the India-Pakistan border further reinforce the metal’s status as a safe-haven asset.
As investors have looked for protection from these geopolitical postcards, they’ve gravitated towards gold. Even as the yellow metal turned deeply lower intraday, the elevated risk environment has propelled safe-haven flows, boosting demand for gold. With geopolitical tensions building around the world, investors are flocking to safe havens to protect their market exposure from downside risk.
Analysts note that the confluence of these geopolitical risk factors will continue to fuel gold’s bullish forces. Continued global conflict and political turmoil created the perfect environment for precious metals to thrive. Those investors looking for stability find them especially enticing in these tumultuous times.
“For Britain, the UK-US deal secures lower tariffs without compromising forthcoming UK-EU talks. And for the US, it signals to investors that the administration is prepared to be flexible on tariffs. But we’re sceptical that the deal will translate into a much wider de-escalation in US tariff policy.” – FXStreet analysis