Most investors are taking the day off on Friday in recognition of Easter weekend. As a result of the reduced investor presence, gold and silver have not really budged from yesterday’s closing values. Despite the marketplace being quieter today, there is still plenty for investors to mull over, most notably the crisis in Ukraine.
Ukraine Slowly Deteriorating, Violence Spreads
Towards the beginning of last week, the market was surprised to see the crisis in Ukraine back on the front-burner. There had been an increased number of reports claiming that armed militiamen were seizing towns, airfields, and even Ukrainian military vehicles. Shortly thereafter, interim Ukrainian president Oleksandr Turchynov ordered the military to take care of the pro-Russian armed forces.
What has ensued over the course of the last few days has been a number of small skirmishes which have resulted in a few deaths and dozens of injuries. The biggest operation headed by the Ukrainian military this week involved the retaking of an occupied airfield in the eastern Ukrainian city of Kramatorsk. While the military made quick work of the occupying rebel forces at the airfield, countless other skirmishes continue to be taking place all over the country. What’s more, the Ukrainian economy is on the verge of complete and total collapse, a situation that would not bode well for a majority of Europe.
Safe-haven demand as an outcome of the increased violence has been rising all week long but is being more or less counteracted by technical selling and a stronger US Dollar. As it stands now, gold is sitting just below the key $1,300 level while silver is hovering under $20/ounce. It is widely believed that safe-haven demand will be able to prop up gold and silver spot values through the weekend and into next week, but so long as the US Dollar continues to perform well there is a strong likelihood that we will see limited improvements to precious metals’ values.