Gold Has Surprise Jump, Continues Beating Stock Market

Last week, gold demonstrated significant strength, achieving over a 5% increase amid escalating tensions between Russia and Ukraine, which drove investors toward safe-haven assets. Its last day of trading for the week shows a tremendous leap up towards its all-time high. Gold's remarkable gains reaffirm its status as a favoured safeguard during geopolitical crises.

Gold’s last day:

Recent developments, including Russia’s deployment of a hypersonic missile targeting central-eastern Ukraine, have been described by Ukrainian President Zelensky as 'a severe escalation'. These actions follow Ukraine’s use of advanced Western missile systems against Russian territories and reports of North Korean troops joining combat operations in Russia.

Amid this environment, UBS maintained its projection of $2,900 for gold by the close of 2025. The team pointed out that gold’s appeal as a hedge extends beyond geopolitical unrest to factors like growing government debt levels.

According to Market Watch, UBS discussed the U.S. dollar's current trajectory. While the dollar may experience short-term strength due to potentially supportive economic policies, UBS suggested its valuation might be overextended. A shift by global central banks toward accumulating gold reserves while reducing dollar holdings underscores this trend, which has been partially attributed to tariff policies and international responses to Russia's 2022 invasion of Ukraine.

Meanwhile, U.S. equities also posted weekly gains, albeit less dramatic. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite each saw approximately 1.6% increases this week, per FactSet data. Year-to-date, gold has surged 30.7%, surpassing the S&P 500’s 25% rise, solidifying its position as a leading performer in 2024.