Rising Global Tensions: Considerations for Gold Investors

During periods of geopolitical tension, war, or broader uncertainty, investors have historically turned to a range of assets, including gold, in search of stability. Gold is often viewed as a potential store of value due to its physical nature and limited correlation with other asset classes in certain environments.

Historical Context: Gold During Major Conflicts and Crises Gold prices have shown varied responses during past periods of conflict and instability, influenced by factors such as inflation, currency movements, supply disruptions and overall market sentiment. Examples include:

• 1973 Yom Kippur War and associated oil crisis — gold prices increased amid rising inflation and energy concerns.
• 1979 Iranian Revolution — gold saw demand as a hedge against political upheaval and inflation.
• 2003 U.S. invasion of Iraq — gold prices rose in an environment of global uncertainty.
• 2014 Russia’s annexation of Crimea — tensions contributed to periods of gold price strength.
• 2022 Russia–Ukraine conflict — gold moved above $2,000 per ounce as investors sought perceived safety.

These instances illustrate how gold has, in some cases, attracted interest during uncertainty. However, gold prices have also experienced declines or stagnation in other periods of tension or economic stress. Past performance is not a reliable indicator of future results.

Drivers and Risks Geopolitical developments, including those involving Iran and potential impacts on global energy supplies, can contribute to market uncertainty. In such environments, some investors consider assets like gold for portfolio diversification, as it may behave differently from equities or fiat currencies. Central banks have also increased gold holdings in recent years amid various uncertainties.

At the same time, gold is subject to price volatility driven by interest rates, currency strength, economic data and other factors. The value of gold can rise as well as fall and there is no certainty regarding its response to any specific event.

Final Thought Investors may wish to consider how physical gold might fit within a broader, diversified approach to wealth management, depending on individual objectives and risk tolerance. Roman Brothers provides information on physical gold products for those exploring this asset class.

Discuss whether gold aligns with your objectives by contacting a Roman Brothers specialist at info@romanbrothers.co.uk or 0208 080 2848.

Roman Brothers Disclaimer The value of gold can rise as well as fall, and investors may receive less than they originally invested. Past performance is not a reliable indicator of future results. This communication is for information purposes only and does not constitute personal investment advice. Tax treatment depends on individual circumstances and may change. Certain UK legal tender coins are currently exempt from Capital Gains Tax for UK residents but tax treatment depends on individual circumstances and may change.