The worsening situation in Ukraine and increasingly strained international relations with Russia are lending more safe haven appeal to gold this week, and should see prices increase further moving forwards.
Now entering a second month, international condemnation of the Kremlin has intensified in recent days, with President Biden referring to President Putin as a war criminal following the discovery of civilians bound and shot in mass graves in areas recently liberated from Russian troops. The White House has issued tough new sanctions, targeting Russian mining companies and military ship builders. Russia has also been suspended from the UN Human Rights Council following a vote by the General Assembly, with the UN citing its “grave concern at the ongoing human rights and humanitarian crisis” unfolding in Ukraine.
With many suspecting that Russia is drawing back troops in some areas in order to consolidate for a new attack, risk appetite is notably down for investors and is causing an exodus to gold. Stock markets have dipped and the U.S Treasure Yields have also fallen this week.
French investment bank Société Générale says that investors should add more gold to their portfolio now, before the yellow metal breaks to the upside and once again posts a record new high.
The bank’s analysts say “We expect gold to reach $1,686/oz ($2,200/oz) in Q2” meaning notable gains are on the horizon.
