Despite geopolitical tensions, commodity (including gold) prices are tame

Genevieve Signoret & Patrick Signoret

Alternative Assets

  • Turmoil in the Ukraine and Iraq is not showing up in energy prices. This means that, if energy prices do embed a geopolitical risk premium, either investors don’t view supplies as endangered or actual supplies (versus mere supply risks) and weak demand are overpowering the risk premium.
  • Gold prices are up a mere half a percentage point in 3 months despite a heightening over the same period in geopolitical tensions.

Turmoil in the Ukraine and Iraq is not showing up in energy prices. If energy prices do embed a geopolitical risk premium, then…
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…either investors don’t view supplies as endangered, or actual supplies (versus mere supply risks) and weak demand are overpowering the risk premium.
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Gold prices are up a mere half a percentage point in 3 months despite a heightening over the same period in geopolitical tensions.
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