Gold Surges $150 in a Single Week as Geopolitical Tensions Reach Critical Levels

In a dramatic demonstration of gold's enduring role as a safe-haven asset, the precious metal recorded its most substantial weekly gain in years, with December futures climbing an impressive 5.87% ($150.90). The front-month contract opened on as Monday at $2,571.50, reached a weekly high of $2,718.20, reflecting mounting investor concerns over escalating global tensions.

The remarkable surge comes amid a severe deterioration in Russia-Ukraine relations, with both sides taking actions that have significantly heightened the risk of broader conflict. The situation took a particularly concerning turn when Russia launched an experimental hypersonic missile at central-eastern Ukraine, an action that Ukrainian President Zelenskiy characterized as "a clear and severe escalation."

Solita Marcelli, Chief Investment Officer Americas at UBS Financial Services' global wealth management division, emphasized that these substantial weekly gains underscore gold's position as the market's preferred hedge against geopolitical tensions. The metal's performance has validated its traditional role as a store of value during times of uncertainty.

The current crisis has reached a new level of complexity following recent policy shifts by both major powers. President Biden's decision to revise restrictions on Ukraine's use of U.S.-supplied missiles, allowing strikes on Russian territory, came in response to Moscow's deployment of North Korean troops in the conflict. This policy shift was quickly followed by a provocative response from Russian President Vladimir Putin, who lowered the threshold for nuclear strike authorization against a broader range of conventional attacks.

Perhaps most alarming is Russia's updated nuclear doctrine, which now considers any attack by a non-nuclear power supported by a nuclear power as a joint attack, effectively expanding the scenarios under which nuclear weapons might be deployed. The doctrine further stipulates that an attack by one member of a military bloc would be treated as an attack by the entire alliance, significantly raising the stakes of any military engagement.

Russian diplomatic sources have drawn parallels between the current situation and the 1962 Cuban missile crisis, widely regarded as the closest the world has come to intentional nuclear war. They have issued stark warnings that Western assumptions about Russian capitulation over Ukraine may be gravely miscalculated. This comparison to one of the Cold War's most dangerous moments has only intensified market concerns, driving investors toward gold's perceived safety.

The recent developments underscore a dangerous escalation in what was already a complex international crisis. With Russia explicitly warning that Western-supplied long-range missiles striking Russian territory could be considered direct NATO involvement in the conflict, the situation continues to evolve in ways that support gold's traditional role as a hedge against geopolitical uncertainty.

Editor's Note: We have included an interview with Patrick Vierra of Silver Bullion TV recorded on November 14th, and published on November 21.

Wishing you, as always good trading,