Gold touched the highest levels of the month today, climbing $16 to $1305.
The war of words in Eastern Ukraine is escalating and talk/fear of a true Russian invasion is on the tip of everyone’s tongue. If Russian soldiers truly crossed the border it would be a quick fight as the took over the Eastern parts of the country with overwhelming military superiority.
The immediate questions would be of a Ukraine declaring a war or Russia or a NATO attack on Russia. For all the rhetoric from the West, I don’t see the courage (insanity???) to attack Russia or even defend Ukraine.
In any case, the rally today is only a tiny taste of what would be in store for gold if Russia went on the offensive. Treasury bonds, the US dollar and yen would be the other, massive knee jerk moves. For now, the climb in gold is a modest reaction to the selling over the past 4 weeks. It will probably fade along with the fear today as Russia returns to a strategy of bankrupting Ukraine until its Eastern residents run into Russia’s arms.
Gold daily chart
