The fragile optimism on equities amid a resilient earnings season has seen European indices edge higher on Wednesday and put downward pressure on gold, pushing the price down below $1,950 an ounce.
The small increase on stocks reflects the large number of bearish factors that are offsetting the bulk of the bullish ones. The near-flattening of the Ukrainian city of Mariupol starkly illustrates how damaging and long-lasting Russia’s invasion of Ukraine is likely to be with any hope of peace looking increasingly remote.
Live Gold Price Chart – $/g
Add in the cost of living crisis as a result of ever-rising inflation and now the International Monetary Fund’s slashing of its forecast for global growth and it is difficult to see where traders are finding the current positive drivers.
In this environment, with fear over the possible escalation of the war in Ukraine an ever-present concern, gold still retains upside potential and could easily spring back above $2,000 an ounce as it achieved last week. And while the war and negative inflationary and growth outlook are providing strong support for gold, the backdrop of central banks likely to continue raising interest rates over the course of the year will cap its upside.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis
