Gold demand surges across the world as Ukraine war flares
Soaring demand comes after an already strong year for physical metal buying, particularly in Western nations. File Picture.
Gold is playing its age-old role as a safe haven in times of wars and crises, and people all over the world are piling in.
Russia’s invasion of Ukraine has sent the price of everything from oil and gas to wheat and metals skyrocketing, sparking inflation fears and threatening global growth.
That is driving retail investors everywhere from Vienna and Singapore to New York to the safety of gold, which spiked to $2,070.44 an ounce, close to the record reached during the pandemic.
The almost 10% surge in gold prices since the start of the year is turning into a boon for bullion dealers like Rudolf Brenner, founder of Philoro Edelmetalle, whose shops in German-speaking Europe now have long lines of buyers — a trend that is likely to continue with the conflict showing no signs of abating.
“When the crisis in Ukraine started, we saw massive orders,” said Mr Brenner, whose sales are triple their normal level.
Similar stories are emerging from gold dealerships around the world. At Empire Gold Buyers in New York, chief executive Gene Furman says 30% of his customers trading luxury items like watches and jewellery want bullion instead of cash.
Gregor Gregersen, founder of Silver Bullion in Singapore, saw gold and silver sales rise 235% in the first week following Russia’s invasion, and demand has only intensified since.
The soaring demand comes after an already strong year for physical metal buying, particularly in Western nations.
Demand for bars and coins hit 1,124 tons in 2021, according to the World Gold Council — the highest in almost a decade.
That helped support prices at a time when institutional investors were not dipping in as much.
Meanwhile, IMF managing director Kristalina Georgieva said a Russian sovereign default is no longer improbable, though it is unlikely to trigger a global financial crisis.
Fitch Ratings had said last week that a bond default was “imminent” as a result of measures imposed since the war in Ukraine began on February 24.
