Experts say gold is getting its groove back. MarketOrders Co-founder and COO Sukhi Jutla told Kitco News, “The price of gold is rocketing at the moment, predominantly because of the geopolitical circumstances. With the increased economic instability caused by the war in Ukraine and Russia, investors are feeling nervous and [are] pulling out of stocks and equities where the returns are dwindling and [are] instead, putting their money into the traditional safe haven of gold.” In other news, all eyes are on the Federal Reserve, which is expected to announce the first interest rate hike this week despite current geopolitical issues.
EFT Trends/Evan Harp
Amid Uncertainty, Gold Is Getting Its Groove Back
After a disappointing 2021, which saw gold close down 3.6%, 2022 has heralded the yellow metal’s resurgence.
“The price of gold is rocketing at the moment predominantly because of the geopolitical circumstances. With the increased economic instability caused by the war in Ukraine and Russia, investors are feeling nervous and pulling out of stocks and equities where the returns are dwindling and instead, putting their money into the traditional safe haven of gold,” said MarketOrders co-founder and COO Sukhi Jutla to Kitco News.
Many analysts note that geopolitical triggers are often only temporary drivers of the price of gold. However, this situation might be unique. TD Securities’ head of global strategy Bart Melek told Kitco News, “Typically, the risk premium to gold following geopolitical event peters out quickly. But in this situation, even if things calm down, you will still have an inflation problem. And it doesn’t look like it will calm down any time soon.”
Read the full story, here.
Reuters via Kitco News
War, pandemic, and inflation deal Fed a complex trifecta
In what now seem the simpler days of December, when there was only a pandemic to worry about, Federal Reserve officials rallied around the view they could tame inflation with modest interest rate hikes while the economy and labor market thrived.
A war in Europe has now been layered on top of the health crisis, and when U.S. central bank policymakers meet this week they will have to decide just how much damage has been done to that rosy outlook, and whether their hopes for an economic “soft landing” have been diminished or dashed altogether.
The Fed is almost certain to raise its benchmark overnight interest rate by a quarter of a percentage point at the end of its two-day policy meeting on Wednesday. More important will be projections showing just how far policymakers think rates will need to rise this year and in 2023 and 2024 to tame inflation that has blasted past their expectations.
You can read the full article, here.
CNBC/Tanaya Macheel & Yun Li
Dow rises 170 points to kick off a big week on Wall Street as Ukraine-Russia war rages on
The Dow Jones Industrial Average rose Monday to kick off an important week, as the Russia-Ukraine war continues to escalate and the Federal Reserve could hike rates for the first time since 2018.
The Dow gained 171 points, or 0.5%, while the S&P 500 climbed 0.3%. The Nasdaq Composite slipped by about 0.1%, as Apple shares fell more than 1%.
Ukraine and Russia resumed talks on Monday. A Ukrainian official said the country’s objectives were to secure a ceasefire and an immediate withdrawal of Russian troops, along with other security guarantees.
You can read the full story, here.