The main reasons for the rapid growth of gold quotes are the unstable geopolitical situation due to the conflict in Ukraine and global inflation. The price per ounce can step over the psychological mark of $2,000 and even break the 2020 record. China, the USA and a number of European states, including Russia, will be able to feel the financial benefits from the "gold rush".

Gold Leap

The price of gold on the stock exchange by mid-February reached an absolute maximum since June 2021. The cost of a troy ounce (the main unit of measure for precious metals, 31.1 grams) came close to $1.9 thousand. During trading on February 17 on the Comex exchange, quotes crossed the critical mark, reaching $1902.2.

By evening, they slightly won back the daily growth, dropping to $1899.1 per troy ounce by 20.08 Moscow time. Against this background, securities of key gold mining companies, including Polyus (+2.55%) and Polymetal (+2.42%), demonstrated a noticeable increase on the Moscow Exchange on Thursday.

However, on February 18, gold continued a small pullback, dropping to $1,892 per troy ounce. The fall as of 19.00 Moscow time was less than 1% - 0.43%.

The quotes will break the record of 2020

The negative exchange dynamics will not last long - gold will continue its progressive growth until May. The end of spring may become a turning point - it is at this time that traders expect a slight correction in quotations, Andrey Morozov, President of the Eurasian Business Alliance, emphasized in an interview with the President of the Union "Eurasian Business Alliance".

“Gold will reach its 2020 high this year when it jumped to $2,070 a troy ounce. From May 2022, we expect a slight correction in the market,” the expert noted.

Financial analyst Andrey Plotnikov agreed with him. He suggested that the global gold exchanges in 2022 will be characterized by instability - ups and downs in quotes will alternate, making life difficult for traders.

“Gold will be able to exceed $2,000 already this year. The exchange record of 2020 is not the limit, ”the expert said. In his opinion, traders are waiting for noticeable fluctuations in the price of the precious metal in the short term, but the price of a troy ounce will gradually rise.

Should Russians invest in gold

Against the backdrop of an unstable geopolitical situation, investing in gold will be an ideal alternative to buying dollars. The American currency is more volatile, subject to various kinds of risks. Because of this, it cannot compete with the precious metal, Morozov noted.

“In bullion and investment coins, in addition to gold quotes, there are also dollar quotes. In any case, physical gold is more reliable and investment attractive than the dollar. It grows both with the growth of metal quotes and with the growth of dollar quotes, ”the expert noted.

Plotnikov added that the competition between gold and the dollar ended after the signing of the Bretton Woods agreements in July 1944. Since then, bullion has traditionally been the safe haven currency for most investors. As long as all goods in the world are traded in US dollars, gold has nothing to fear in terms of competition.

“Hyperinflation, which has played out in earnest around the world, in 2021 led to the fact that investors preferred to transfer part of all capital to a “safe haven” - bullion. The most correct decision now would be to buy long futures contracts for this type of metal,” the analyst suggested.

Which countries will benefit?

After the rise in stock prices, the main beneficiaries will be the countries with the largest gold and foreign exchange reserves. These include the two leading economies in the world - China and the United States. A number of European states, including Russia, will also be able to benefit financially from the appreciation of gold, Morozov stressed.

“Countries with large gold reserves will win - Switzerland, France, Italy, India, the Netherlands and Japan. The key beneficiaries will be the states with the largest gold reserves — the United States, Germany, Russia and China,” he said.

As of January 2022, the gold and foreign exchange reserves of Washington amounted to 8133 tons, Berlin - 3359 tons, Beijing - 1948 tons. In Russia, by the end of 2021, this figure was at the level of 2299 tons.

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