As the ruble collapsed under the strain of economic sanctions after Russia invaded Ukraine, the Russian people turned to gold to protect their wealth. Russians went on a gold-buying spree in the first couple of weeks after the invasion. Sberbank ranks as Russia’s largest financial institution. It reported the demand for gold quadrupled during the […]
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Financial Times/Max Seddon, Roman Olearchyk and Heny Foy/3-28-2022
“Russia is no longer requesting Ukraine be ‘denazified and is prepared to let Kyiv join the EU if it remains military non-aligned as part of ongoing ceasefire negotiations, according to four people briefed on the discussions.”
USAGOLD note: Russia’s position softening is most likely what’s behind today’s decline in gold and silver prices.
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MarketWatch/MyraSaefong/3-24-2022
[Gold market analyst Brien Lundin] believes the end result of the gold-related actions would be to ‘alert the 36 countries who hold significant portions of their gold reserves in the values of the New York Federal Reserve that they should take their gold back as soon as possible.’”
USAGOLD note: What Lundin says is logical. He adds that such liquidations would “create significant turmoil in the gold market since the [Federal Reserve] has demonstrated difficulty in actually finding and transporting the gold held for other nations.” In short, any gold the Fed cannot deliver would have to be sourced in the open market exacerbating an already tight physical supply situation. We would add that the bullion banks storing gold at the Bank of England will be similarly affected
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Bloomberg/john Authers/3-24-2022
“It’s been a long month, and not just for the luckless citizens of Ukraine. Russia’s invasion of its neighbor created Europe’s first full-blown land war between two sovereign states since 1945. Clarity is further away than ever, and the chances of an outcome with which anyone can be happy are dwindling.”
USAGOLD note: With that, Authers launches into a lengthy discussion on where the global economy and financial markets might be headed as we move to month two of the Ukraine War. “Even if some ceasefire is agreed,” he warns, “lifting sanctions could be seen as rewarding [Putin’s] aggression.” That is an end game investors would be well served to consider.
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