Since the outbreak of the Russia-Ukraine conflict in February 2022, gold prices have repeatedly reached historical highs, becoming the top choice for global investors seeking safe havens. However, as the US and Russia held talks in Riyadh, Saudi Arabia, regarding potential progress in peace negotiations, turbulence began to appear in the gold market. After continuous gains, gold prices experienced a pullback for the first time, notably falling below $2,900 per ounce on February 14 and further declining to $2,880 per ounce by February 17, leading investors to question if the gold bull market has peaked.
During the talks, the US and Russian delegations decided to establish a negotiation team to resolve the Ukraine conflict and discussed the possibility of restoring normal bilateral relations, causing market concerns that the war might be nearing its end. As the prospects for a peace agreement emerge, the demand for gold as a safe-haven asset may decline. Morgan Stanley predicts that if a peace agreement is reached, gold prices could fall to $2,700 per ounce or even lower by the end of the year.
Meanwhile, global central bank gold purchases continue to be a key support for gold prices. Data from the World Gold Council indicates that central bank gold purchases continued to increase in 2023, expected to reach 1,045 tons in 2024, surpassing 1,000 tons for the third consecutive year. However, with progress in the peace talks on the Russia-Ukraine conflict, whether gold prices can maintain their strong upward momentum will still depend on the market's reaction to political developments.
For investors, although gold may face short-term correction risks, in the long term, it remains an important asset for countering economic uncertainties. Goldman Sachs analysts are optimistic about gold's future potential, expecting prices to reach $3,000 per ounce by the second quarter of 2026.
