Gold prices jumped to $3,373 on Monday, and the strong day gives a path toward the all-time high near $3,500.
The new intensity in the Russia-Ukraine conflict lifted gold prices after peace talks failed to bring a solution. As the talks were coming to an end, Ukraine escalated drone strikes with one of its boldest moves to date. Despite another round of peace talks expected in Istanbul, markets are fearing an escalation in the conflict.
Analyst Tim Waterer, said:
“Gold is benefiting from growing uncertainty—both geopolitical and trade-related—alongside a weaker US dollar, which adds to its appeal”.
Trump said he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.
Renewed tariff threats from US President Trump aimed at steel and aluminum imports were another reason for panic. The recent developments pushed investors to seek safety in traditional safe-haven assets, led by gold.
On Friday, Trump announced plans to hike tariffs on steel and aluminum imports from 25% to 50%, raising concerns in global markets and prompting the European Commission to warn of retaliatory measures.
Markets are now on edge, wondering how Russia will respond to the heavy drone attack that destroyed nuclear-capable aircraft.
According to JP Morgan, despite the strong run of precious metals, gold mining shares still look undervalued. Part of the dislocation is due to the bank’s commodities team predicting a price of $4,100 an ounce for 2026 for bullion.
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