(MENAFN- Khaleej Times)
Published: Thu 24 Feb 2022, 2:57 PM
Last updated: Thu 24 Feb 2022, 10:00 PM
Gold prices surged more than two per cent on Thursday to their highest in over a year and might sustain the uptrend to hit $2,000 in the coming days with some even forecasting a run to $2,500 or above as the Russian attack on Ukraine threatens to have wider geopolitical and economic ramifications.
Spot Gold climbed 1.8 per cent to $1,941.50 per ounce by 0841GMT, after hitting the highest since January 2021 at $1,948.77.US gold futures jumped 1.7 per cent to $1,943.20.
Frank Holmes, CEO of US Global Investors said that gold has historically performed well during political crises and sees the price climbing as much as 50 per cent higher from current levels.
“It is a non-event for gold to go up or down 20 per cent in a year,” he added.
“Two years ago, gold went up two standard deviations for the first nine months, so if it were to do that again, then it could go to $2,800. That would be up to two standard deviations, and that wouldn't be extraordinary. I think gold is undervalued. I think it's probably worth about $4,000 if you use money printing number data, then you're talking $7,000 or more. I feel comfortable that gold can easily run to $2,500 or $3,000.”
'Gold is a safe-haven asset along with the US dollar, and this is its day. We could inevitably see new all-time highs in gold,' Jeffrey Halley, a senior market analyst at Oanda, said.
ALSO READ:
- LIVE Russia-Ukraine crisis: Ukrainian refugees start arriving in neighbouring central European nations
Prices could continue rallying towards resistance at $1,960 an ounce and test $2,000 in the next few sessions, Halley added.
Holmes said Bitcoin, on the other hand, has not reacted as positively to rising geopolitical tensions in Ukraine.
“I think when you look at gold, its breadth and depth, historical significance as a wonderful asset, is really showing up when you have war. Bitcoin is a new phenomenon. It's over a decade old. It's new, and its ecosystem around the world is new. Yes, it's widely embraced by generations X, Y, and Z and millennials, in particular, but gold has a phenomenal historical significance that whenever there's big inflation or there's political turmoil, that gold is the asset class of choice,” Holmes said.
Wars and geopolitical tensions have, in the past, provided tailwinds for gold, and Bitcoin still needs to overcome its regulatory challenges before it takes off, he said.
However, a leading research firm Capital Economics said that at some point, geopolitical uncertainty will give way to bearish fundamentals.
Analysts at Capital Economics reiterated their bearish stance on precious metals. It still sees the price falling to $1,600 an ounce by the end of the year. Oliver Allen of the UK-based research firm said it's only a matter of time before raising interest rates to weigh down the precious metal.
—
MENAFN24022022000049011007ID1103759373
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.