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…

…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.