The sanctions against the Russian energy sector and other exports are contributing to price increases and shortages of commodities across the global economy. Given the current, inflationary environment, demand could be pressured which could encourage stagflation. If wages cannot keep up with inflation and the government steps in to offer support feeding inflationary pressures, a stagflation cycle might be precipitated.
In February, gold experienced its largest monthly rally since May 2021. Given the Ukrainian conflict, gold might literally and figuratively shine as an inflation hedge. Gold on Tuesday again rallied beyond the $2,000 per ounce mark, implying its appeal as a safe-haven asset.
