Gold has reached an all-time high of $2,078.80 per ounce, sending its estimated market capitalization above the $13 trillion dollar barrier for the first time ever, as investors hurry to safeguard their investments from inflation caused by the ongoing Russian-Ukraine war.

Gold futures are currently up 0.55 percent, trading at $2,055.70 per ounce. The yellow gold reached a high of $2,069.89 per ounce during the Asian session, not far from the recently established all-time high. The dollar, which generally moves inversely to gold, is down 0.09 percent at 98.98 basis points but remains close to a more than one-and-a-half-year high achieved earlier this week.

Apart from the United States and the United Kingdom prohibiting Russian oil imports, DailyFX strategist Margaret Yang told Reuters that “there appears to be a lack of further escalation in hostilities between Russia and Western powers.” Geopolitical events are the primary drivers of gold, and if the political skies clear, I expect gold prices to quickly return to $1,800 levels.

Joe Biden, the Vice President of the United States, announced an embargo on Russian oil and other energy imports. Britain also stated that it will phase out Russian oil and oil products imports by the end of 2022, giving the market and businesses time to identify alternatives. Treasury yields in the United States are rising as investors anticipate the U.S.

Treasury yields in the United States are rising as investors expect the Federal Reserve of the United States to raise interest rates this month when it announces its policy decision next week. On the other side of the Atlantic, the European Central Bank will announce its policy decision on Thursday.

Apart from gold, other precious metals have been positive since the beginning of the war, as investors want to hold on to as much as they can as a hedge against inflation. Palladium, for example, is up 2.01 percent as of this writing, selling at $3,212.47 per ounce. The metal has risen by more than 38% since Russia’s invasion of Ukraine two weeks ago, reaching an all-time high of $3,417.02 per ounce on Monday.

Russia is a significant global producer of palladium, accounting for more than 40% of global exports. Palladium, according to ED&F Man Capital Markets analyst Edward Meir, “may move significantly higher since, of all commodities, it has the biggest percentage share coming out of Russia.” It recently surpassed previous year’s high. So, if it’s the same as last year’s high before the invasion, this tells me that we should be considerably higher after the invasion.

“In only a few months, the globe moved from loathing gold as prospects for a healthy global economic rebound dampened demand for safe-havens, to now growing concerned about stagflation and recession threats,” said Ed Moya, analyst at online trading platform OANDA.

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