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 stating that the armed conflict is unlikely to end in the fall of 2024; most likely, the war will continue for several more years.
But how will such a situation affect global financial markets? Which assets will rise in price, and which could fall in price due to continued military action?
What should ordinary investors do? Where should they invest their money to protect their savings from the impact 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 exceeded the mark of $2,500 per troy ounce, and in the future it may reach $3,000.
Therefore, investing in precious metals is still relevant; you can open buy trades with the following brokerage companies – Gold Trading Brokers .
Increase in the stock price of companies linked to the military-industrial complex. Defense and arms spending will only increase in 2025, meaning arms manufacturers will receive more orders and profits.
For this reason, shares of General Dynamics, Lockheed Martin, and BAE Systems are considered promising securities. In addition to the likely price growth, most of these arms companies also pay dividends. You can purchase these securities through the following brokers:.
Tightening monetary policy will lead to higher interest rates, meaning that assets such as government bonds will become even more profitable.
At the same time, the currencies of countries whose economies are not heavily impacted by military conflict will strengthen. The UAE dirham, Singapore dollar, and Swiss franc are likely to rise.
Rising energy prices – oil and natural gas prices are likely to rise; Brent crude is currently around $80 per barrel, and it is likely that the price will rise above $90.
In addition, electricity prices are expected to rise; Ukraine's energy system has been severely damaged by the shelling, and the electricity shortage will undoubtedly trigger higher prices on the energy market.
As for the situation in Ukraine itself, there's little hope for a positive outcome. Amid rising inflation, energy and labor shortages, the existing crisis will only worsen. According to the most optimistic forecasts, if the military conflict continues, the hryvnia will easily surpass 50 hryvnias to the US dollar.
The Ukrainian stock index will continue to fall and is highly likely to fall below 1,500 hryvnias.
