Gold Spot Price Open: $1,308
Gold Spot Price Close: $1,310
Change in Gold Spot Price: +$2
Silver Spot Price Open: $20.02
Silver Spot Price Close: $20.00
Change in Silver Spot Price: -$0.02
Precious metals were aided by renewed worries surrounding the situation in Ukraine, but by day’s end, only gold and palladium were still hanging on to their marginal gains. When all was said and done, gold gained about two dollars while silver fell by only a few pennies. Palladium had a decent day today, but by the time markets closed, palladium’s spot value was just barely above where it had began the day while platinum ended up losing a few dollars.
Russia-Ukraine Standoff Imminent
With each passing day it seems as though a new development emerges from the situation engulfing much of Eastern Ukraine. Today, multiple news sources were reporting on a Russian humanitarian convoy, consisting of more than 250 vehicles, reportedly heading to the besieged Ukrainian city of Luhansk. According to many, Luhansk has been perhaps the hardest hit of any Ukrainian city in recent weeks and the people there are slowly but surely running out of food and medical supplies.
While there is no denying the people of Luhansk’s need for assistance, Ukraine is having a hard time trusting this Russian convoy, especially because it has not been approved or inspected by the Red Cross. Though it may be a few more days until the massive convoy is at the border, Ukrainian officials have already announced that they will not allow the trucks and personnel to cross. This is a precaution due to the fact that a lot of suspicion currently surrounds the contents of those 200+ vehicles. With the remaining residents of Luhansk now without food for nearly 10 days, it is clear that a humanitarian crisis is unfolding in Eastern Ukraine. As this week plays out, and the convoy approached the border, the world will be paying close attention to see what happens next. As of now, precious metals are receiving some underlying support from the tension surrounding the situation in Ukraine, but there is no saying how long this will last. As a result of today’s new headlines about the Russia-Ukraine situation, US and European equity markets sold off at a noticeable rate. It will be interesting to see if they can recover in the coming days or if investor worries will continue to devalue stocks.
Economic Expectations Decrease Severely in Europe
Before US markets opened today, a report from Germany was released and painted a picture of an investing market that is not at all confident in the economies it is investing in. The German ZEW Economic Expectations index fell considerably in August and has declined for 8 consecutive months now.
In addition to investors and analysts being concerned about the intensifying situation in Ukraine, the report also cited worries with regard to the slow pace of economic recovery across the EU region. Recent pieces of EU economic data have been downbeat and generally unimpressive. Despite recent measures instituted by the ECB aimed at generating more rapid economic recovery, Europe seems unable to catch a break.
Fittingly enough, the Euro currency declined against the Dollar for yet another day today. Despite this, the USD did not have all that great of a day on Tuesday. Over the past month or more, however, the USD has been trending almost entirely upward as a result of loosening monetary policy across Europe and tightening monetary policy in the United States.
Even though precious metals spot values have only seen marginal improvements over the last few days, it is still reassuring to see metals perform well. George Gero, VP at RBC Capital Markets in New York holds that “improving gold prices are due to escalations of Ukraine-Russia tensions and Iraq conflicts, but traders are also worried about Europe snail’s pace recovery.” So long as investors continue to worry about the wide array of geopolitical and economic issues happening throughout the world at present, precious metals are likely to be on the receiving end of more safe-haven demand.
Wrap-Up
As was mentioned yesterday, we are now in the full swing of the dog days of summer, meaning that the economic atmosphere over the next few weeks is likely to be a good bit quieter than it is at most other points in the year. Though there are plenty of geopolitical happenings to distract investors, there really won’t be that much in the way of markets-moving economic data being put on the table anytime soon. Still, the duration of this week is liable to bring about a number of reports and issues upon which the marketplace can fixate its attention.
