The situation between Russia and Ukraine is driving gold prices higher.

On May 27,How do Forex brokers make money amidst the sudden escalation of the Russia-Ukraine conflict, former U.S. President Trump issued a shocking warning on the social platform “Truth Social,” accusing Russian President Putin of “playing with fire.” He hinted that his team is in covert communication with the Kremlin. These remarks caused a huge stir, further destabilizing an already tense international situation.

Trump's Rare Tough Stance

In his latest post, Trump stated, “Putin clearly doesn't realize that if it weren't for my secret mediation, Russia would have faced complete disaster!” He described the recent large-scale Russian airstrikes on Ukraine as “utterly insane,” a rare display of strong rhetoric, sparking speculation that his diplomatic stance might be undergoing a fundamental shift.

Kremlin's Swift Retaliation

Dmitry Medvedev, Deputy Chairman of the Russian Security Council, responded in English on the X platform, bluntly stating, “The real horror is World War III.” His harsh words reflect the high level of importance the Kremlin places on these statements. Notably, Putin and Trump had a private meeting lasting two hours last week, with initial hopes of a “30-day ceasefire memo.” However, the latest developments have shattered this illusion.

Intense Battles on the Sumy Frontline

According to reports from the Russian Ministry of Defense, Russian forces have achieved a tactical breakthrough in the Sumy region of Ukraine, seizing control of four key villages. Additionally, Russian air defense systems shot down 112 Ukrainian drones within just three hours, including 12 aiming to attack Moscow itself, indicating that the conflict is gradually spilling over into the Russian heartland.

Ceasefire Negotiations Deadlocked

The Ukrainian side accuses Russia of stalling at the negotiation table while launching fierce attacks on the battlefield, attempting to fight and talk simultaneously. The White House disclosed that a new round of sanctions against Russia is nearly ready, awaiting Trump's final decision. Meanwhile, Putin's earlier “border buffer zone” plan is quietly advancing under the cover of ongoing hostilities.

Global Risks Heat Up, Gold Back in Focus

As the conflict escalates, safe-haven assets are in high demand, with gold becoming a market focal point. Data shows that since the intensification of the Russia-Ukraine situation, international gold prices have rebounded sharply in the short term, and trading volumes have surged. Several analysts point out that gold is likely to remain supported in the near term, especially under the influence of the following factors:

1. Rising Risk Aversion: The escalation of geopolitical conflict is a typical catalyst for gold bulls, and if the situation worsens, gold prices could challenge historical highs.
   
2. Uncertain Federal Reserve Policy: Despite persistent inflation, several Federal Reserve officials have recently voiced dovish sentiments, leaving the interest rate path uncertain, which benefits the non-yielding asset gold.
   
3. Increased Dollar Volatility: The unpredictability of Trump's trade and foreign policies could weaken the strong dollar, providing additional momentum for gold.
   
4. Energy Market Turbulence: The conflict has affected key energy transportation areas, and if oil and gas prices surge, inflation expectations will rise, indirectly benefiting gold.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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