Gold prices broke the $2,000 an ounce level for the first time in one and a half years. Investors rushed to the safety of the precious metal in the wake of an escalating Russia-Ukraine crisis. At the same time, equities crashed and inflation continued to rise unchecked.1
“Gold will likely find some heavy traffic around the $2,000 level initially, but once it is cleared, assuming no change in the Ukraine situation, it will quickly move to the $2,100 region and on to new all-time highs,” said OANDA senior analyst Jeffrey Halley.
Gold prices have climbed for 11 of the most recent 15 sessions. The last time gold consistently traded above $2,000 was in August 2020 when Covid-19 muddied the global economic outlook.2
Gold Up – Stocks Down
Soaring inflation is shaking the entire economy. In response, the Fed is promising unprecedented rate hikes next week which threaten to grind growth to a halt. Experts are warning that a period of stagflation is highly likely.
“Consequently, ‘stagflation’ is rapidly becoming the central focus in portfolio strategies,” said Jim Paulsen, chief investment strategist for the Leuthold Group. “Preparing for slower growth and more persistent inflation is driving investor fears and actions.”3
These fears caused equities to plunge. The Dow Jones Industrial Average plummeted almost 800 points on Monday. This crash follows four straight weeks of declines. Year to date, the Dow is down over 9.5% and the NASDAQ is down almost 18%.
Equities are a terrible place to be in compared to gold. Gold is up over 9.4% for the year to date and over 19% from one year ago. 4
The Fog of War is creating uncertainty, not only in Ukraine, but throughout the global economy. In the face of crashing stock markets, raging inflation and rising interest rates- investors are proving that one thing is certain.
Gold is the safe-haven Americans are turning to now. The future of the yellow metal only looks brighter and brighter. If you want the security gold offers, contact American Hartford Gold today. 800-462-0071
Notes:
1. https://www.cnbc.com/2022/03/07/gold-markets-palladium-russia-ukraine-crisis.html
2. https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-03-07/card/gold-price-surges-above-2-000-to-highest-level-since-2020-qgwY20qn7okINzTyAc9k
3. https://www.nbcnews.com/business/markets/dow-falls-as-market-sell-off-continues-rcna19031
4. https://www.marketwatch.com/investing/index/djia
