The gold market increasingly under geopolitical influence

Gold, dollar and economy

Geopolitical uncertainties are giving the yellow metal a safe haven role, especially for emerging countries. With Western sanctions imposed on Russia since its invasion of Ukraine, they want to depend less on the dollar in the new sequence of “de-globalization” that began with the Covid-19 pandemic.

Gold prices took on some color at the start of the year. This Wednesday, they rose on the New York market by more than 1%, to 1,859 dollars an ounce (31 grams), or more than 5% in one month, reaching their best level for 6 months. A development that reflects its status as a safe haven when the future looks dark.

However, the yellow metal did not outperform in 2022, a year that saw an energy crisis, a war in Europe with the invasion of Ukraine by Russia last February, and an inflation rate not seen since the end of 1970s.

Indeed, the price of gold has returned to almost the same level as it was in January 2022, around 1,800 dollars per ounce. Because if its price soared in March, during the first weeks of the war in Ukraine, reaching up to 2,070 dollars, it fell back to almost 1,600 dollars in September, with the acceleration of the rise in rates, in particular of the Federal Reserve of the United States, to calm the rise in prices.

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