Gold is considered a 'safe-haven' asset during periods of geopolitical uncertainty, war, or economic instability. Investors typically flock to gold to protect their wealth, leading to increased demand and higher prices.
A global conflict would likely destabilize financial markets, causing sell-offs in stocks and riskier assets. As investors seek stability, gold could see significant inflows, further driving its price.
War on such a scale could lead to supply chain disruptions, energy crises, and widespread economic sanctions. These disruptions can fuel inflation and economic instability, both historically positive factors for gold prices.
Governments involved in war often resort to significant military spending, leading to increased demand for resources and precious metals like gold, driving their prices higher.
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