Gold Prices Hit $2,000 an Ounce after Investors Pile into the Safe-Haven Asset as the Ukraine Crisis Worsens
March 9, 2022
Investors are piling into the precious metal as the ongoing crisis worsens. Gold is often seen as a safe-haven asset in times of market turmoil, because it retains its value during a time of crisis.
Gold topped $2,000 an ounce in Europe for the first time since August 2020 and was last trading up 1.67% at $1,999.40 an ounce.
Stocks and bonds have struggled since Russian president Vladimir Putin announced a ‘special military operation‘ in Ukraine two weeks ago, while oil and gold have both surged. Bitcoin has continued to be volatile, losing the ‘digital gold’ title previously bestowed on it by some investors.
Gold prices passed $2,000 at a time when the crisis in Ukraine looks to be worsening. Putin called western sanctions imposed on his country “akin to a declaration of war” on Saturday, while US secretary of state Anthony Blinken said the US is considering imposing an embargo on Russian oil exports the following day.
“The situation in Ukraine is escalating ever further: Russian President Putin said at the weekend that the economic sanctions imposed by the West were tantamount to a declaration of war,” Commerzbank commodities analysts Daniel Briesemann and Carsten Fritch said. “Given this backdrop, investors are likely to continue to seek refuge in the safe haven that is gold.”
Goldman Sachs strategists forecast that investors will continue to buy gold as the invasion continues, reiterating their long-term price target of $2,150 an ounce.
“The current environment presents a good entry point to buy precious metals as a currency of last resort against growing risks to the global economy,” a team led by the bank’s vice president for commodities research Mikhail Sprogis said.