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• Russia ranked second worldwide in terms of gold mining in 2020
• Gold price rises despite the solid U.S. dollar index
Gold prices surged 19-month high to $2,000 per ounce on Monday, as investors are rushing towards the safe-haven assets amid the ongoing Russia-Ukraine war.
The surge in the prices of the yellow metal reflects increased risk aversion from falling equities market and speculative cryptocurrencies among market participants.
Inflationary fears triggered the spot gold price to jump increased by nearly 10% in a month.
Gold contract for April also rose almost 1.5% on Monday to $2007.50.
Limited supply
The yellow metal is considered one of the oldest safe-haven assets.
Although the U.S. dollar is also considered a reliable store of value during uncertain times, gold prices rose despite a solid inflow in the dollar index.
Moreover, investors are also worried that sanctions on Russia, which ranked second in the world in terms of gold mining in 2020, will reduce the supply.
Russia, which ranked second according to the World gold Council, unearthed 331.1 tonnes of gold in 2020, while the U.S. was in the fourth and mined only 190.2 tonnes.
Surging oil prices
Along with gold, oil prices also surged on Monday morning, the highest in 13-years, as the market is speculating supply disruptions after the U.S. Secretary of State Antony Blinken said that the nation and its allies are considering banning Russian oil and natural gas imports.
The European Union on Thursday said the bloc is ready in case Russia decides to cut off gas supplies to Europe in the wake of the Ukraine invasion, and on the following day, foreign affairs ministers of E.U. countries met in Brussels to discuss the imposition of energy sanctions on Russia.
Picture Credit: Business Insider