empty
 
 
22.09.2022 09:43 AM
Gold to win favor with investors after Kremlin's mobilization announcement

This image is no longer relevant

Gold is going to win favor with investors as a safe haven asset after Russia's President Putin delivered a televised address to order a partial mobilization of reservists to bolster forces in Ukraine. The Russian leader warned the West he was prepared to use all available means to protect the Russian territory and respond to all threats to its territorial integrity. Putin's remarks were viewed as an escalatory address and another "nuclear blackmail".

This image is no longer relevant

The deeply unpopular Kremlin's move enabled the US dollar to conquer a new 10-year peak. The US dollar index skyrocketed above 111 points shortly after the announcement. Nevertheless, gold managed to show resilience despite a new spike in the US dollar.

This image is no longer relevant

Some analysts speculate that gold might have surged as high as $1,700 per troy ounce following the Fed's policy decision depending on the Fed's hawkish magnitude. In practice, the gold rally didn't happen. Head of Commodity Strategy at Saxo Bank Ole Hansen said that the recent price moves prove gold stayed afloat because of high demand for safe-haven assets, even though gold prices dropped to the lowest levels in two years, testing critical long-term support.

By and large, gold has outpaced other assets amid global risk aversion that has been setting the tone for the overall market sentiment. Remarkably, gold has not collapsed to historic lows despite the stunning rally of the US dollar and massive sell-offs of stocks and government bonds. The geopolitical conflict in Ukraine briefly pushed the gold price to $2,000 per ounce. Nevertheless, later on, the geopolitical threat disappeared from investors' scope of interest. Indeed, investors have shifted focus toward inflation dynamics and rate hikes by major central banks.

Hedge funds have been keeping short positions on gold for five weeks in a row. Ole Hansen admitted that gold has been bruised by ongoing headwinds on the back of the cycle of rate hikes. He also added that besides the demand for safety, investors view gold as a shield against errors in monetary policies. Influential central banks have not been able to contain inflationary pressure worldwide so far.

Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO
  • Depósito al azar
    ¡Haga un depósito en su cuenta de $3,000 y obtenga $8000 más!
    ¡En Marzo, sorteamos $8000 dentro de la campaña Depósito afortunado!
    Obtenga la oportunidad de ganar depositando $3,000 en una cuenta de operaciones. Tras haber cumplido esta condición, se convertirá en un participante de la campaña.
    UNIRSE AL CONCURSO
  • Opere de forma inteligente, gane un dispositivo
    Recargue su cuenta con al menos $500, regístrese en el concurso y tenga la oportunidad de ganar dispositivos móviles.
    UNIRSE AL CONCURSO
  • 100% de bonificación
    Su oportunidad única de obtener un bono del 100 % en su depósito
    OBTENER BONO
  • 55% de bonificación
    Solicite un bono del 55% en cada depósito
    OBTENER BONO
  • 30% de bonificación
    Reciba un bono del 30% cada vez que recargue su cuenta
    OBTENER BONO

Recommended Stories

¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback