Ukraine crisis offers gold a chance to shine

Russia's threats to Ukraine are pushing the price of gold higher. But investors are also worried that US interest-rate rises could go too far and spark a recession.

People buying gold in China
Consumption of gold in China rose by more than a third last year
(Image credit: © Getty Images)

When things get really scary, investors don’t buy bitcoin, they buy gold, says Karen Maley in the Australian Financial Review. Last year was disappointing for gold, as inflation fears boost cryptocurrencies, dubbed “digital gold” by some, at the expense of the physical kind. Yet “the threat of an imminent European war” has pushed gold up 5% this month to $1,900/oz, an eight-month high. Meanwhile, bitcoin has fallen 20% so far this year. Gold has got an additional boost from “stronger physical demand”. Consumption in China, the world’s largest gold consumer, rose by more than a third last year amid a strong economic recovery from Covid-19.

Precious-metal mutual and exchange traded funds enjoyed five consecutive weeks of net inflows through 16 February, says Hardika Singh in The Wall Street Journal. A sign of strong investor interest, that is the longest streak since August 2020, when gold hit an all-time high of $2,067/oz.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.