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The 2022 Gold Rush: Russia-Ukraine War Shocks Precious Metal Prices

April 30, 2022: World economies reel from vital shortages and soaring inflation from the war in Europe

February 27, 2022 Global protests against Russia’s invasion of Ukraine

Prices for gold and other precious and essential metals are on the rise since Russia’s invasion of Ukraine, due to fears of supply shortages and an increasing demand for metals. Global sanctions on Russia, which is a major producer of gold, palladium, nickel and aluminum, is expected to greatly impact the supply of these metals.

Oil, nickel and aluminum futures are skyrocketing as investors foresee the risk of supply shortages. David Rosenberg, Rosenberg Research’s chief economist, confirms that these price shocks couldn’t have come at a worse time. “This is clearly a potentially huge stagflationary shock for the world economy at a time when pandemic-induced bottleneck pressures were just showing signs of a thaw,” says Rosenberg.

How Gold Prices Changed after the Russian Invasion of Ukraine

From January 2022 through April, the price of gold rose 11.8%, while during the same period, the broad stock index declined by 9.6%. Gold prices increased by more than $40 in the latest upward trend that began in the first week of March. “We expect it to reach $2,000 in the international market in the short run,” according to IIFL Securities’ Anuj Gupta.

If you already own gold and other precious metals in your IRA, the rise in price could be comforting, because it shows how your gold acts as a hedge in your portfolio against the falling value of other investments and the soaring inflation, often followed by long recessions during times of crisis.

Sanctions Against Russia Powers a Price Rise in Palladium, Aluminum and Nickel

As a vital producer of palladium, nickel and aluminum, the strong sanctions against Russia are causing fears of shortages that are fueling the rise in prices of these precious metals.

Just one Russian producer, Norilsk Nickel, yields 5% of the world’s supply of nickel each year. Nickel prices have increased 40%, with precious metals also pushing higher.

There are very clear industry-specific shortages of which Americans are already feeling the effects. Invesco’s chief strategist, Kristina Hooper writes, “Russia is the world’s largest exporter of palladium, so there is the potential for more auto supply-chain disruptions given that palladium is used in catalytic converters.”

Automobile manufacturers, already experiencing shortages from the pandemic, are now dealing with production problems because of shortages in the supply-chain due to the war in Europe. “Metals markets are dominated by fears of supply outages,” wrote analysts at Commerzbank.

How this War in Europe May Your Investments

Investors who haven’t yet opened a precious metals IRA or who haven’t transferred a large enough percentage of their wealth into physical gold, should consider how this European conflict is affecting their financial portfolios.

With the increased volatility seen in global stock markets, the U.S. interest rate rise necessary to bring crippling inflation to heel, and now – just as people were looking for economic relief as the pandemic slows, Russia’s attack on Ukraine has sent markets reeling with the effects of strong sanctions against a major producer of precious metals, oil and grains in a globally-dependent world economy.

Even though most investors know the importance of diversification, many still only hold cash, stocks and bonds, but haven’t yet moved at least 10-15% of their holdings into the historically safest store of value ever known – gold and other precious metals.

Now could be the right time to add gold, silver, palladium and platinum to your retirement portfolio by opening a gold IRA, or increasing the percentage of precious metals you do hold since you can now see how the strength of value mitigates the losses of your other investments.

Preppers Understand Why Gold is so Resilient during Global Economic Crises

People who form the robust “preppers” movement in the U.S. hold gold and silver both at home and in their retirement portfolios. They know that gold has historically been the world’s most stable store of value and wealth.

Although gold and silver have not been used as a common method payment of payment for the last decades, and even though it may seem unimaginable today, that could change if a major country’s fiat currency suddenly devalues to the point that precious metal coins and bars were once again the only sure store of value. If the house of cards that is fiat currency fails even temporarily, gold and silver may be one of the few means of exchange available to obtain food, housing and transportation during a crisis.

How Did Gold Perform vs Stocks During Economic Crises and the First Iraq War?

Over the past 5 crises for the stock market gold managed positive performances in all of them. Stocks lost an average of 24.4% over these 5 periods, while gold had positive returns for each of them. Investing a part of your savings in gold helps protect your wealth from the adverse effects in times of a calamity, whether it’s war or a recession.

1987
Black Monday
1990
War in Iraq-Kuwait
2001
Dot-com crash
2008
Financial Crash
2019-2020
Pandemic
Rise in Gold Price +4.2 % +11.1 % +18 % +79.9 % +7.6 %
Decline in Stock Market -22.6 % -21 % -38.5 % -20.1% -19.8%

Retirees, Preppers, and Serious Investors Rush to Open Gold IRAs

Do you know what was the highest price of gold in history? – Gold reached its all-time high in August 2020 at $2,074.88. Once again, in 2022, gold has skirted the $2,000 per ounce mark. Gold’s capacity to hedge against inflation, deflation of the dollar, stock market volatility, national and global economic crashes, pandemic, wars and global political instability looks to do the same as we experience the fallout from this war in Europe.

Economies worldwide are moving into another inflationary period from Russia’s invasion of Ukraine along with Russia’s threats against other countries and its recent actions of cutting oil exports to Poland and Bulgaria.

It makes sense to diversity your financial savings to include a healthy percentage in physical gold, silver and other precious metals, and the safest way to do that is with the added protection of a gold IRA that comes with approved and highly-secured storage vaults across the U.S. and Canada. Learn how to open a gold IRA with one of the best gold investment companies in the nation.

Risk Disclosure

All investments including precious metals, such as gold and silver, involve risk and you may get less back than what you put in. Always consult a licensed professional financial advisor before investing your money. Consumers should be aware that past performance does not guarantee future returns.

Disclaimer

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