Are the Mideast and Ukraine Wars Causing Gold Prices to Rise?
Gold is currently trading at $1906.20 per Troy ounce. That’s where it was trading in late September. By the end of September, that price had fallen more than $100.00. But since then, the trading price has rebounded to its end-of-September level and now looks very strong.
Is the Rebound Due to the Way People Are Investing in Gold?
As you know, two wars have been raging in different parts of the world during the last month. Does that mean that investors see gold as a strong and stable investment in times of global crisis?
There is no way to know for certain, but it could be. It could also be true that gold prices will rise even more soon.
There is no way to know for certain. However, gold prices can often rise during times of geopolitical uncertainty, including periods of war or conflict. This is because gold is considered a safe-haven asset, and investors may turn to it as a store of value in times of crisis.
Here are a few reasons why gold prices may rise during times of war:
Currency devaluation - In some cases, governments may resort to printing more money to finance war-related expenses. This can lead to a devaluation of the currency, making gold more attractive as a store of value.
Inflation hedge - During times of war, governments may increase spending to fund their military efforts. This can lead to inflationary pressures, and gold is often seen as a hedge against inflation.
Safe-haven demand - Investors often seek refuge in assets like gold when they are concerned about the stability of financial markets or the global economy. Gold is seen as safe because it has intrinsic value and is not subject to the same risks as currencies or stocks.
Uncertainty and fear - The uncertainty and fear associated with war can drive investors to gold to protect their wealth. When geopolitical tensions rise, there is often increased demand for gold.
However, it's important to note that while gold can rise in value during times of war, its price is also influenced by a wide range of other factors, including interest rates, economic data, and market sentiment. As a result, gold prices can be quite volatile, and the relationship between war and gold prices is not always straightforward. It's advisable to consult financial experts and analyze the specific circumstances surrounding any given situation to understand the impact on gold prices.
Should You Hold or Sell Your Gold Scrap?
Because gold prices could drop again as they have in the last month, it is tempting to sell gold and gold scrap today. Or if you think that gold prices will rebound further, you may be thinking about holding your gold until that uptick happens.
What kind of gold or gold scrap do you have? If you have scrap, we believe that its value is likely to continue to rise. To learn more about recycling your gold scrap for maximum return, give our precious metal refiners a call at 800-426-2344. Or email us at sales@specialtymetals.com.
If you’re investing in gold and would like to realize the greatest possible return on your investment, you should talk to us.