Gold, nicknamed the yellow metal, has hit a record high at $2,000 an ounce trading zone, the highest since August 2020, as investors run towards what they perceive as safe-haven assets amidst geopolitical tension caused by the Russian-Ukraine war.
Last week, the benchmark gold futures rose 4.2% for their largest weekly advance since July 2020. Since August 2020’s high, gold has dropped to as low as $1,600 levels.
However, due to a hawkish federal reserve, global inflationary pressures, and now an ongoing war, it has pushed the asset class which many believe to be a safe haven asset to trade above the $2,000 resistance zone.
Gold’s standing as an inflation hedge has also been greatly boosted by the growth in U.S. prices due to ultralow interest rates and trillions of dollars of pandemic-related spending. The Fed slashed U.S. interest rates to nearly zero after the Covid-19 outbreak in March 2020 and kept them there to enable economic recovery.