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
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
FinTech is the sum of financial and technology, and it’s one of the fastest growing tech industries. Total global investments in FinTech almost reached $50 billion last year, but there is still a great deal of confusion over what it is and what it means – especially as it applies to retirement. Building financial startups is not simple, but with the right team, technology and an innovative approach it can be an extremely interesting domain to disrupt. FinTech heralds a financial revolution that...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...