Overnight, gold prices surged to more than £2,500 per ounce as Israel launched air strikes on Iran. So, why do gold prices soar during geopolitical events?
Rick Kanda, Managing Director at The Gold Bullion Company, has shared his expert insight into why gold increases in value during global conflict:
People across the world have woken to worrying news coming out of the Middle East, as Israel has launched a military attack on Iran. In most cases, geopolitical events have damaging impacts on stocks and investments; however, this isn’t the case for gold.”
“Historically, gold has a proven track record of performing well during economic uncertainty and global conflicts due to its intrinsic value, which is why many investors see gold as a safe haven. During times of conflict, investors steer away from investing in assets such as stocks and bonds, as geopolitical events often threaten the infrastructures supporting these assets.”
Global geopolitical tensions and trade uncertainty have put the price of gold in a strong position over recent years, with many experts believing there has never been a better time to invest in the metal, but any investment choice isn’t to be made lightly”
Gold investment should not be dependent on whether the market is either surging or falling; you should be more focused on whether your financial situation enables you to do so at that particular time. Gold should always be seen as a long-term investment strategy. The time is right if you have the funds, you are in a financially stable position, and you’re looking for an investment that will store value long-term without thought towards any short-term price fluctuations.”
