Russia-Ukraine Conflict Benefiting Gold Bulls in Safe Haven Scramble

Investors are looking to add gold once again as market uncertainty remains as the Russia-Ukraine conflict continues to weigh heavy on the capital markets.

This is pushing gold to all-time highs, based on data from Fitch Solutions Country Risk & Industry Research.

“The agency says that, while the gold price is hovering near its all-time-high of $2,075/oz amid concerns about the Ukraine war and rising global inflation, dollar strength, rising vaccination rates and recovering bond yields will cap gold’s rally to a certain extent,” a article says.

“The gold price will be heavily influenced by the war and its turnout or evolution in coming months; however, Fitch Solutions expects the gold price to remain elevated compared with pre-Covid-19 levels,” the article notes.

With rate increases expected to continue to push the dollar higher throughout the year, the agency noted that it shouldn’t affect gold to a large degree. While easing may occur, it won’t be substantial.

“In the longer term, the agency expects gold prices to remain on an easing track, as risk-on sentiment returns and the appeal of gold lessens,” the article adds. “However, gold prices will only weaken to about $1,600/oz by 2026, and not the $1,393/oz witnessed in 2019, the agency says.”

An ETF for Gold Exposure

Exchange traded funds (ETFs) can give investors gold exposure in the convenience and dynamic trading ability of an ETF. One fund to consider is the Invesco DB Gold (DGL).

DGL seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Gold Index Excess Return™ plus the interest income from the fund’s holdings of primarily U.S. Treasury securities and money market income less the fund’s expenses. The fund is designed for investors who want a cost-effective and convenient way to invest in commodity futures.

DGL Chart

For more news, information, and strategy, visit the Innovative ETFs Channel.