Gold prices rose amid market concerns regarding Russia's invasion of Ukraine. Analysts predict that gold prices will rebound further if the situation worsens.
The escalation of the Russo-Ukrainian conflict is still one of the factors driving gold prices today (14/February). Gold futures on the Comex in New York jumped 0.8% to $1856.65, close to November's record. Spot gold slipped 0.2% to $1,856.30 an ounce, but was still in the area of strengthening last weekend. The chart below also shows XAU/USD up 0.13% from its daily Open level and trading at $1860.88.
If Conflict Gets Worse, Gold Futures Will Be More Expensive
Investors flocked to buy safe-haven assets amid the uncertainty of the Russia-Ukraine geopolitical conflict being intervened by the Western bloc. The United States still believes that Russia can launch a military attack on Ukraine at any time in the near future.
"We're not saying that the final decision has been made by President Putin," said US security adviser Jake Sullivan, "What we're saying is that we have a reasonable level of concern based on what we see on the ground. Our intelligence analysts already know that, so we send this clear message."
The US allegation has the support of other allies, including Britain. In fact, the US and UK have said they will send economic and military aid to Ukraine as soon as possible.
On the other hand, Russia still denies the accusations. They insisted that there would be no invasion of Ukraine. West is called too hysterical in response to current conditions.
The two main issues that have become the center of attention of commodity traders in the Russia-Ukraine issue are Western sanctions on Russia and the scenario if Russia actually invades Ukraine. These two things will have a big impact on the gold market.
A number of analysts have revealed that geopolitical uncertainty is likely to cause volatility in the gold market this week. Most predict an increase in the price of gold futures when the crisis heats up.
"The increase (in gold prices) was caused by warnings from US intelligence agencies that a Russian invasion of Ukraine was imminent. As a result, gold is in great demand as a safe haven," said Commerzbank analyst Daniel Briesemann, as quoted by Markets Insider.
"How the development of the Russia-Ukraine conflict is likely to dominate events in the gold market this week. If the situation there does escalate (the situation worsens -ed), then gold prices may immediately respond with further increases," continued Briesemann.
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