Gold and silver spot values are both hovering around even but are feeling pressure from an increasingly bearish market. Safe-haven demand is being triggered due to a growing risk-off sentiment among investors, but safe-haven demand alone has not been enough to greatly improve gold nor silver’s position.
There have been a few important pieces of economic data released this week, but they have, for the most part, had little impact on the precious metals market. Instead, investors are more readily focusing on the crisis in Ukraine, which is slowly deteriorating once more.
Crisis In Ukraine Intensifies
Since the beginning of last week we have been keeping a close eye on a new slate of developments from Ukraine. It has been reported that a growing number of pro-Russia militiamen are taking over towns and buildings throughout the eastern half of Ukraine. This week alone it was reported that these militiamen took over an airfield in the town of Kramatorsk and were also seizing armored vehicles which belong to the Ukrainian army.
Ukraine’s interim president Oleksandr Turchynov gave his military permission to combat the pro-Russian rebel forces earlier this week and ever since then small skirmishes have been breaking out all over the country. In Kramatorsk the seized airfield was the scene of an intense firefight between rebel and Ukrainian forces, a fight which eventually saw Ukraine’s military regain control of the airfield. Leaders from Ukraine, Russia, the US, and the EU are meeting in Geneva, Switzerland today in an attempt to devise a solution for the ongoing crisis. Having said that, no one is really holding out too much hope that today’s meeting will bring out any real solutions. As a result of the recent flare-up in violence across Ukraine, safe-haven demand for precious metals has been on the rise. Normally, rising safe-haven demand would be enough for spot gold and silver to be given a noticeable boost, but the US Dollar has been performing well of late and is preventing metals from making any substantial gains.
European equity markets are feeling pressure from the crisis in Ukraine as it is more readily breeding a risk-off attitude amongst investors. As we approach the Easter weekend, it is widely believed that as the violence in Ukraine increases so too will the amount of investors who turn to safe-haven gold and silver. The real question, however, is whether or not more demand for physical metals will translate into loftier spot values once the marketplace opens next week.