The ongoing geopolitical conflict between Ukraine and Russia has been setting off economic dominoes. The present invasion has led to Russia’s sanctions from global markets, proving it difficult to project the supply of gold in the upcoming months.
And with the gold price breaking through all-time highs, many investors are turning to the yellow metal. Yet with no end in sight to the Russia-Ukraine invasion, how is this impacting the global supply chain of gold?
The Effect of Russia-Ukraine War on Gold Supply
Russia happens to be one of the top suppliers of gold around the globe. With the present war escalating between Russia and Ukraine, experts are claiming this could hamper the supply chain of gold. However, according to some reports, mining operations are not facing the repercussions of the war.
Mining companies based in Russia, including Ukraine, are confident that contingency plans have been are in place for the ongoing conflict. A year's worth of supply of gold may be already in production. However, pushing forward, it is expected to have a significant impact on the mining industry in Russia. Nevertheless, the fear of gold supply shortages due to the conflict among investors is growing as Russia faces rising sanctions from the US.
Russia is a top producer of gold, and investors now fear that western sanctions will reduce the available supply of gold further increasing prices. Furthermore, fear of inflation is expected to drive investors to buy gold as a safe-haven investment during the present market volatile market. This has already resulted in the price of gold hitting the USD 2,000 mark per ounce.
How Will Geopolitical Tension Impact the Price of Gold?
As of the present, the price stands at USD 2,000, with projections stating that the value is heading even higher. According to experts dealing in marketplace commodities, the gold price has been surging in light of the recent escalation between Russia-Ukraine.
Furthermore, sanctions on Russian trading has created a sell-off in the equity market, causing a depreciation in the fiat currency. This should also increase the demand for gold, further driving the price.
There is also a risk of gold premiums rising due to the Russia and Ukraine conflict. Worldwide inflation from the pandemic and now the war will continue to boost investment in gold, and investors holding gold will continue to hold their positions, further pushing the price.
Any form of economic turmoil results in the global supply chain of industrial equipment being negatively affected, with market crashes and rising inflation as well. With high commodity prices on the horizon from rising inflation and escalating geopolitical tensions between Russia and Ukraine, it is the best option for investors to buy gold coins and hold them through the uncertain times ahead. BuyGoldCoins.eu is a good choice for investors looking to buy gold during this world crisis.