RBI Grade BNABARD ESISEBI
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Gold has emerged as the most stable asset during periods of heightened geopolitical stress, while crude oil has shown the highest sensitivity, according to a study published in the monthly bulletin of the Reserve Bank of India (RBI).
“RBI MPC Unpacked: Key Theory Meets Today’s Macro Trends”Tap to play · from the C4S channel
The study was authored by RBI staff members under the guidance of Poonam Gupta, with a clarification that the views expressed are those of the authors and not the official position of the RBI.
Key Findings of the Study
Asset-wise Response to Geopolitical Risk
- Gold
- Most stable and least sensitive to geopolitical shocks
- Reaffirms its role as a safe-haven asset, hedge against inflation, and store of value
- High prices during 2022–2025 reflect investor response to global uncertainty and tensions
- Crude Oil
- Most sensitive to geopolitical shocks
- Volatility rises sharply with increases in the Geopolitical Risk (GPR) Index
- Vulnerable due to exposure to supply disruptions, regional conflicts, and sanctions
- Silver
- Intermediate sensitivity
- More volatile than gold due to industrial demand exposure, but less sensitive than crude oil
- US Treasury Securities
- Show a steady rise in volatility as geopolitical risk increases
- Reflect flight-to-safety behaviour, where strong demand lowers yields but creates moderate volatility due to shifting capital flows
