Gold extended its rally to an 18-month high within striking distance of $2,000 an ounce on Monday, as geopolitical and economic uncertainties lifted demand for the safe-haven metal. Headlines about the ongoing conflict between Russia and Ukraine continued to weigh on sentiment, as fighting intensified over the weekend and president Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered. Investors positioned out of equities into safer assets, while oil and other commodities extended their rallies on further supply disruptions. Rising energy costs also added to inflationary and growth concerns, at a time the Federal Reserve is preparing to raise interest rates. A growing list of economists are warning of stagflation risk, where high inflation meets slowing growth, an environment traditionally seen as supportive of gold.
Gold is mostly traded on the OTC London market, the US futures market (COMEX) and the Shanghai Gold Exchange (SGE). The standard future contract is 100 troy ounces. Gold is an attractive investment during periods of political and economic uncertainty. Half of the gold consumption in the world is in jewelry, 40% in investments, and 10% in industry. The biggest producers of gold are China, Australia, United States, South Africa, Russia, Peru and Indonesia. The biggest consumers of gold jewelry are India, China, United States, Turkey, Saudi Arabia, Russia and UAE. The gold prices displayed in Trading Economics are based on over-the-counter (OTC) and contract for difference (CFD) financial instruments. Our gold prices are intended to provide you with a reference only, rather than as a basis for making trading decisions. Trading Economics does not verify any data and disclaims any obligation to do so.
