Gold set a new all-time record high of $2,078.80 per ounce on Tuesday, following growing economic instability in light of sanctions upon Russia amidst the ongoing invasion of Ukraine.

Investment bankers Goldman Sachs are now predicting gold will hit $2,500 per ounce by the end of the year, with the combination of war in Ukraine and inflation driving demand strongly at present. It was only two months ago that the bank forecast $2,150 per ounce – a target that the latest record came just $71.20 short of. Should the invasion continue for another two weeks or two months, then the volatile but rising price for gold should be able to pass that predicted value.

The reason for Goldman Sachs' change of heart is due to concerns over struggling economic growth in America and the risk of recession, and added potential for China to mirror Russia's aggression by invading Taiwan – a country on its borders whom it does not recognise as an independent state. Continued conflict, sanctions, and trade disruption would feel as bad if not potentially worse than the peak difficulties experienced during the early Covid lockdowns.

At present NATO has yet to mobilise on the offensive, only allowing troop movements from members to reinforce states neighbouring Russia in case of additional invasions elsewhere in the Baltic region, and the focus has been primarily on seizing assets. The US, UK, and EU have acquisitioned billion in response to the conflict, with the notable hit to Chelsea football club in the UK today – two weeks to the day since Russian troops illegally entered neighbouring Ukraine.

Russia's invasion, portrayed by Russia as a battle to end nazism in eastern Ukraine and to provide a buffer against NATO's growth, has seen the country's main stock market shut down and the value of the rouble plummet, with major companies like Ikea and McDonalds closing stores in the country in protest to the war, and banks such as Goldman Sachs cutting ties altogether.

Russia isn't alone in the economic hit however. The FTSE 100 is down 1.4% today, with Italy's FTSE MIB down 4%, France's CAC down 3.1%, and Germany's DAX down 3.3%. The US markets have felt the pain a little less given the lack of immediate proximity, but even the the Dow and S&P are down 1% at opening today.

A map of the current state of Ukraine, courtesy of the Ministry of Defence.

Russia is currently working on making a corridor from Crimea in the south across to the eastern front where the two new independent states of Luhansk and Donetsk reside, but there are also pushes from the north, from the Belarus border, and along the west from Crimea towards Odesa – thus depriving Ukraine of its port to the Black Sea and hindering trade. Such actions suggest that Russia isn't about to give up on its invasion in the immediate future, and given the trend for rising gas, oil, and bullion prices for the past fortnight it's only logical to presume similar gains will continue to occur in the short-term.