FX.co ★ Gold expected to climb as high as $2,000

The geopolitical crisis has caused fluctuations in the financial markets, leading to one extremely volatile dispute after a while.

Yesterday, Russia launched a full-scale invasion of Ukraine. Russia's ongoing military invasion aims to demilitarize Ukraine.

Stock markets around the world experienced significant declines. In the United States, US stocks fell sharply when the US trading session opened yesterday and recovered in the second half of the trading day. The S&P 500 plunged to a low of 4104.4 before bouncing back.

Crude oil futures climbed to just over $100 a barrel and then dropped again.

Gold also rallied, experiencing a rollercoaster ride with huge price swings.

The drop in gold prices after a major break above $1,960 an ounce was influenced by the rapid recovery of the US stock markets as well as the extraordinary strength of the dollar.

Technical studies and fundamental analysis show that the precious metal generally remains bullish even with sharp price swings.

The fact that gold dropped to a low of $1,878.60 and is now recovering and confidently trading above $1,900 per ounce indicates two factors.

Firstly, the geopolitical crisis resulting from the Russian invasion is an ever-changing event that has not yet been resolved. Secondly, inflationary pressures continue to rise in both energy and food costs. These two facts largely support the assumption that gold prices will continue to rise and may reach $2,000. It is only a matter of time.

Russia's actions against Ukraine will undoubtedly affect global growth, forcing central banks around the world to think about raising interest rates.

Given the geopolitical uncertainty in Eastern Europe, the biggest threat to the global economy is still inflation.

The European economy is exposed to the growing threat of inflation, which tends to push the single economy into recession.

A new conflict will only exacerbate consumer price problems as energy and food prices are distorted by further pressure on the global supply chain.