Gold price (Yellow Metal), Silver (XAG/USD) extends its recovery for a 2nd consecutive day, trading around $2,636 in European hours on Tuesday, as Ukraine has already launched US-made ATACMS ballistic missiles into Russia, according to reports from local media RBC citing a source from the Ukrainian Armed Forces. The move has escalated fears of a nuclear war, prompting investors to flee towards safe-haven assets such as Gold.
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Geopolitical Tensions
Fears of an escalation in geopolitical tensions were already high after Russian President Vladimir Putin’s approval of the country’s nuclear policy revision, which appeared to be an answer to the US for backing Ukraine’s military strength by allowing Kyiv to use Washington-supplied ATACMS missiles to attack Russia’s Kursk region.
Nuclear Weapon
The nuclear doctrine “concerns the fact that the Russian Federation reserves the right to use nuclear weapons in the event of aggression with the use of conventional weapons against it” where that is deemed to have created “a critical threat to sovereignty or territorial integrity,” Dmitry Peskov, Press Secretary of the President of the Russian Federation, told TASS on Tuesday.
Peskov also stated that Russia acknowledges US President Joe Biden’s approval of the supply of missiles to Ukraine as an intent to prolong the conflict.
Historically, the safe-haven appeal of precious metals such as Gold increases at times of uncertainty or heightened geopolitical risks.
Gold Price Forecast for 2025
Gold price for a year-long horizon and sees it rising to $3,200——$3,500 by 2025 on multiple tailwinds. “The structural driver of the forecast is higher demand from central banks, while a cyclical lift would come from flows to exchange-traded funds as the Federal Reserve cuts (interest rates).”
