Welcome!

Article

The Allure of Gold as Ukraine Crisis Escalates

Gold Prices & The Ukrainian Conflict

Gold was on a roll two weeks ago and surpassed the $1,300 per ounce level due to escalation of political tensions between Ukraine and Russia, before recording losses as markets are anticipating that the Fed will trim even further its asset purchasing program later this month.

On April 24th gold’s price dived to $1,268 per ounce, more than a 10-week low, and then rallied as the tension in Ukraine intensified. During the three sessions from April 24th to April 27th, the price of gold increased by $20 to end the trading week with a 1.6% surge after demand by the markets for safe haven assets.

Pro-Russian militia seized control of a number of government buildings and other strategic positions at the eastern part of Ukraine, before Ukrainian forces clashed with them and regained control. The incidents resulted in five casualties and the Kremlin hinted at military action on their behalf. The struggle continued during the weekend with the abduction of several members of the Organisation for the Security and Cooperation in Europe (OSCE) by pro-Russian rebels. Although one of them was later released because of health problems, the rebels voiced their intention to keep the rest of the hostages. The United States and European Union imposed financial and political sanctions, such as visa rejections and asset freezes, to a number of Russian individuals and companies soon after the annexation of Crimea from Ukraine by Russia.

On Monday April 28th the Kremlin raised concerns over an increase of U.S. and NATO military forces close to Russian borders after no signs of de-escalation of the crisis. Russian Defence Minister Sergei Shoigu had a telephone chat with his U.S. counterpart Chuck Hagel where no compromise reached between the two parties. In efforts to apply pressure to Russia for discontinuing their military activity in Ukraine, the U.S. and Europe imposed new sanctions to new Russian policymakers.

Although the Ukraine crisis was a main reason for traders’ reduction of risk appetite and investment in safe haven assets, weak housing economic U.S. data did little to help the dollar to strengthen and added to gold’s price rally. According to a report released lately, new home sales decreased in March by 14.5% in relation to the previous month and the inventory for unsold new homes increased to 3.2% for the same month.

It’s a different story for gold since the beginning of May as the precious metal erased part of its gains. There is increasing speculation that the Federal Reserve will further trim its asset purchasing program during the two-day meeting of its members. The price decreased as much as 1.4% and at some point dived back to $1,286 per ounce. Even though there are some short-term volatility injections to the gold’s price such as economic indicators, the effect that the Ukraine-Russia crisis is having on prices is more likely to prevail. Further escalation of the crisis and any further military action by any of the parties involved might increase demand again for the shiny metal, whereas a deflation of the problem could drive investors back to more risky assets.

More Stories By Jay Elliott-Purdy

Jay Elliott-Purdy joined easy-forex in 2010 and is the UK Branch Manager. He has an MSc in International Economics and has managed portfolios in South America and more recently in London with easy-forex. Elliott-Purdy specializes in trader education on technical and fundamental market dynamics. He has presented at some of the UK's biggest Trading and Investment conferences and has comprehensive knowledge of intra-day demand and supply, behavioral finance and trading psychology.

Latest Stories
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...