How will the escalation of the conflict in Ukraine affect global markets?
Recent events in Ukraine and Russia have significantly reduced the likelihood of successful negotiations between these countries.
More and more political scientists are saying that the armed conflict is unlikely to end in the fall of 2024; most likely, the war will continue for many more years.
But how will such a situation affect global financial markets, which assets will increase in price, and what may fall in price due to the continuation of hostilities?
What should ordinary investors do, what should they invest in to preserve their savings from the influence of inflation and price risks?
In such a situation you should expect:
Further growth in the price of gold and other precious metals, the price of gold has already surpassed the mark of $2,500 per troy ounce, and in the future it may reach $3,000.
Therefore, investments in the precious metal are still relevant; you can open purchase transactions in the following brokerage companies - Brokers for trading gold .
Increase in the value of shares of companies associated with the military-industrial complex. In 2025, spending on defense and weapons will only increase, which means companies producing weapons will receive more orders and profits.
For this reason, promising securities include shares of General Dynamics, Lockheed Martin, and BAE Systems. In addition to the likely price increase, most arms companies also pay dividends. You can buy securities from the following brokers -.
Tightening monetary policy , which will lead to an increase in interest rates, which means that assets such as government bonds will become even more profitable.
At the same time, the currencies of countries whose economies are not strongly influenced by military conflict will strengthen their positions. Probable growth can be expected from the AOE dirham, Singapore dollar and Swiss franc.
Rising energy prices – with a high probability, prices for oil and natural gas will rise; currently the cost of Brent is about $80 per barrel; it is likely that the price will rise above $90.
In addition, an increase in electricity prices is predicted; Ukraine’s energy system was quite heavily damaged as a result of shelling, and a shortage of electricity will definitely provoke an increase in prices on the energy market.
If we talk about the situation in Ukraine itself, then we can’t expect anything good here; against the backdrop of increasing inflation, shortages of electricity and labor, the existing crisis will only intensify. According to the most optimistic forecasts, if the military conflict continues, the hryvnia will easily overcome the mark of 50 hryvnia per US dollar.
The Ukrainian stock index will continue to fall and with a high probability its value will drop below 1,500 hryvnia.