If you are investment planning in Cheshire, many appear to be viewing gold as a safe bet. The price rose to nearly $3,450 per ounce following the latest explosion of geopolitical tension in the Middle East.
Analysts have said that gold is profiting from a softer dollar and regional instability. Investors often shy away from assets such as stocks and bonds, because the infrastructure that supports them is more vulnerable to political events and shocks. According to Rick Kanda at The Gold Bullion Company, gold has an established track record, performing well whenever there is economic uncertainty or global conflict. For investors, it has become a ‘safe haven’, in large part due to its intrinsic value.
Another market analyst, Nikos Tzabouras, said that nervousness around further escalation has the potential to sustain gold at high prices, fuelled by intense demand and lingering uncertainty over trade tariffs. Much will depend on whether tensions ease in the coming days. History suggests that the yellow metal has always held its own, even amid conflict and economic crises.
Over the last 12 months, gold has reached record highs, increasing in value by over 40%. However, while investors are impressed by its relative stability as an asset, it is by no means immune to price fluctuations. The value of gold is sustained in part by its relative rarity, given barely 216,265 tonnes have ever been mined, and as a physical product outside the banking system. The question remains though as to whether more mining and greater geopolitical and economy stability in the world will drive a downward trend.
