World Gold Prices Rise to 1,933 US Dollars, Triggered by Inflation, the Ukraine-Russia Conflict, to the Fed’s Plan

JAKARTAKOMPAS.com – World gold prices rose at the close of trading Thursday (Friday morning WIB). The Russia-Ukraine conflict that continues to heat up and soaring inflation makes market players demand for assets safe haven gold rose.

Reporting from CNBC, Thursday (4/3/2022), the price of gold in the spot market rose 0.4 percent to a level of 1,933.31 US dollars per year. troy ounce. Similarly, the Comex New York Exchange gold futures also rose 0.7 percent to the level of 1,935.90 US dollars per troy ounce.

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World gold prices continued to strengthen, driven by the heating up of Russia-Ukraine geopolitics, which also involved Western countries. Especially when Russia launched a full-scale attack on Ukraine, sending gold prices soaring by 3.4 percent.

On the other hand, a series of sanctions imposed on Russia have made commodity prices rise, supply chain bottlenecks, and slowed global growth. This condition pushed global inflation higher, and provided benefits for gold, which is a safe haven asset.

Also read: Markets are calmer after Russia’s attack on Ukraine, world gold prices are now shrinking

However, future movements in gold prices will be overshadowed by the plan of the United States Central Bank or the Federal Reserve (The Fed) which will raise interest rates at the March 2022 Federal Open Market Committee (FOMC) meeting.

“Gold has largely traded below the support of the Ukraine-Russia headlines, but is also starting to rekindle its relationship with real yields ahead of the March FOMC meeting,” Standard Chartered analyst Suki Cooper wrote in a note.

Also read: Russia attacks Ukraine, the world gold price is getting closer to 2,000 US dollars

Market participants are currently looking for clues regarding the possibility of a US interest rate hike. Although gold is considered a safe investment in times of political and economic uncertainty, rising US interest rates increase the chances of losses from holding interest-free gold.

“Expectations for rate hikes have been reduced and we continue to expect the Fed to raise 25 bps in March. Along with the flight to safety, the conflict has implications for physical markets as Russia restarts central bank gold buying,” Cooper added.

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