The Russian invasion of Ukraine is another event in recent years that has sparked an uptick in demand for gold as a safe-haven asset, as investors adopt a risk-off sentiment in uncertain times.

Research agency Fitch Solutions Country Risk & Industry Research has revised upwards its gold price forest for this year from between $1 650/oz and $1 700/oz to between $1 800/oz and $1 900/oz.

The agency says that, while the gold price is hovering near its all-time-high of $2 075/oz amid concerns about the Ukraine war and rising global inflation, dollar strength, rising vaccination rates and recovering bond yields will cap gold’s rally to a certain extent.

The gold price will be heavily influenced by the war and its turnout or evolution in coming months; however, Fitch Solutions expects the gold price to remain elevated compared with pre-Covid-19 levels.

Fitch Solutions maintains its real gross domestic product growth forecast for the world at 4.1% this year, which is a slowdown from the 5.7% growth rate estimation Fitch Solutions made in 2021.

In the longer term, the agency expects gold prices to remain on an easing track, as risk-on sentiment returns and the appeal of gold lessens.

However, gold prices will only weaken to about $1 600/oz by 2026, and not the $1 393/oz witnessed in 2019, the agency says.