Monday, June 16: The price of gold has climbed 6.7% this year primarily on the back of tensions in Ukraine. So, when Ukraine no longer looked like it was going to result in the next Cold War, the yellow metal faltered, until the next potential disaster showed its head, and here we are discussing the three-week high in the gold price.
Iraq
The ISIS insurgency in Iraq is certainly the main factor contributing to gold’s three-week high that we see this morning. The ongoing turmoil in the Middle East has renewed gold’s safe-haven appeal amongst speculators, the metal is often seen as an asset to turn to during times of geopolitical stability.
India
It is widely rumored that the newly elected Indian government will announced a 2-4% cut in gold import duty in the coming month of July. This is likely to temporarily send premiums crashing once again, however it will no doubt lead to a surge in imports as gold artisans are able to work with gold at a slightly more affordable rate.
Russia
It is important to make clear at this point that tensions in Ukraine have effectively climbed a few levels, as top-palladium producer Russia this morning threatened to turn off gas supplies to Ukraine amid rising tensions following the shooting down of a plane by pro-Russian militants. The tensions have not decreased in the former-Soviet Union country and relations have not eased.
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