Russia’s invasion of Ukraine in March has shaped the second quarter of the year on all fronts, increasing geopolitical tension, sending shock waves through markets, causing economic uncertainty and strangling supply chains. In the direct aftermath of the Russian military’s advance into Ukraine, a flight to safety for investors pushed gold to record highs, with the precious metal trading at a never seen before high during morning trading on 08 March to then end the day just five dollars away from the highest price currently recorded of £1,575.83 ($2,075.14).
The first IHS Markit Investment Manager Index to be published after the Russian invasion underscored the impact for gold, with author Chris Williamson noting that investors moods had become ‘gloomy’ as a result of the war. He said, “The Ukraine crisis exacerbates existing headwinds and concerns. Geopolitics are exerting a greater drag on the market than at any time in the survey’s one-and-a-half-year history, as is the deteriorating global economic environment. The invasion has led to heightened worries over slowing growth, soaring inflation, a cost-of-living squeeze, and more protracted supply chain bottlenecks.”
Each of those conditions remains in play today as we head into June and with peace talks having come to unsuccessful conclusions on several occasions and Russia now making a push into new cities, it’s unlikely to change substantially in the near future.
