Metals Should Be On Your Portfolio Radar This Month
May 9, 2022 (Investorideas.com Newswire) Precious metals have long been a safe haven for investors during times of political or economic turbulence. Several tensions are brewing in the global arena currently, shifting investors' attention once again towards more stable products like metals and other commodities.
Gold and silver, the two most popular metals, have been trading at relatively higher levels during March. This positive surge is attributable mainly to the prevailing high inflation rates and fearful market sentiments on account of the ongoing Russia-Ukraine conflict.
In the second week of March, gold prices swiftly crossed the $2000 mark and touched the $2070 level, showing a remarkable increase from the $1800 price range of February 2022. It's only the second time in history that the yellow metal has touched this hefty level. The first instance was during August 2020, when the pandemic had started wreaking havoc on various levels.
Like gold, several other metals like copper, nickel, and silver are also experiencing a bullish momentum. Silver rallied towards its 2022-highest level of $27 at the beginning of March, manifesting the increased demand for silver.
Impact of Russia-Ukraine crisis on metals prices
The escalating tensions between Russia and Ukraine have shaken investors, leading them to speculate on the possible repercussions of this conflict. Major stock indices like the S&P 500 and the Dow Jones Industrial Average (DJIA) have been nosediving since the start of this year amid the high inflation rates and geopolitical disturbances.
As gold tends to be a safe hedge during unpredictable times, this current crisis is pumping the metal prices and elevating its demand. Moreover, with a series of sanctions on Russia, a significant gold producer, the metal's demand could further increase. As a result, many investors are moving towards safer investment options like gold and silver.
Where are metals prices heading this month? A struggle between Fed's hawkish shift and geopolitical developments
Last month, the US Fed officials announced their strong commitment to restrict the rising inflation by increasing interest rates. In general conditions, this declaration would have pulled down gold and silver prices; however, no substantial change was seen due to the present war tensions, geopolitical turmoil, and fears of stagflation.
If the conflict is resolved and tensions fade this month, the markets will probably continue their original trajectory, and metals will probably decline in value accordingly. But as long as the uncertainties and tensions do not dwindle, metals prices are due to remain elevated. In such ambiguous conditions, investors can take advantage of the metals CFDs offered by many brokers like SquaredFinancial. This way, no matter where the prices go, you can timely extract returns by short selling or going long on trade positions.
Should you keep an eye on metal investment products?
According to some financial experts, the current economic slump should not be taken lightheartedly, highlighting the need to consider off-center investing options like metals and commodities. Metals and their derivative products can be a good investment option for portfolio diversification and hedging against inflation, even if the current tensions subside.
You can also capitalize on the metals' price movements without actually owning the assets with the help of CFDs. You can benefit from the metals market via these derivative instruments without going through any complex acquisition procedures. SquaredFinancial, for example. provides gold and silver CFDs to its clients with low spreads and minimal fees.
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