How will the price of gold react now that hostilities have broken out in Ukraine, despite the improvement in the health situation and a probable fall in inflation?

Rampant inflation combined with the Ukrainian crisis and the geopolitical tensions that it is causing have, for more than 3 months, caused the price of gold to soar to around 1900 dollars an ounce, the traditional unit of measurement for gold.

As a safe-haven asset in times of great uncertainty, and as recent history has shown, the price of gold is rising sharply as savings depreciate, investors and individuals alike are buying gold, which automatically pushes the price up.

Longer than expected inflation is also having a significant impact on the gold price: in January, the price increase in the US reached 7.5%, the highest in the last 40 years. It should be noted that gold is a hedge in case central banks are unable to contain inflation.

Investors are also concerned about the worsening Russian-Ukrainian crisis which reached its climax on 24 February 2022 with the much feared Russian invasion of Ukrainian territory. The many negotiations of the most optimistic have failed. There is now a real risk of a stock market crash scenario: it seems more than likely that the price of gold, a safe haven asset that has experienced several months of consolidation, will continue its upward trend in the weeks to come. Given the current context, there is every reason to believe that the market has the capacity to set a new all-time high in 2022.