Precious metals are feeling some pressure on Thursday, in stark contrast to what was the case only a day ago. After gold and silver spot values edged higher throughout a majority of yesterday, it comes as no surprise that a technical pullback is responsible for today’s slow start. Though this week has not been very busy from an economic standpoint, there is a good deal of EU economic news to talk about. As we look forward to the last day of the trading week, it is likely that investor attention will remain fixated upon the violence and tensions in Ukraine. There have been a few new developments in this situation, all of which have caught the attention of the investing world.
Russia Escalates Tensions Over Ukraine
Unless you have been living under a rock, you probably know that the EU and the United States have been placing economic sanctions on Russia for its involvement in the annexation of Ukraine as well as their continue support of pro-Russian rebels. The sanctions have just recently become a bit more severe, but Russia still refuses to change its stance on Ukraine.
This week saw tensions between Ukraine and Russia escalate even more due to the fact that the Russian military is massing combat-ready troops just over the Ukrainian border. Despite the Kremlin not announcing any plans to mobilize its military within Ukraine’s borders, many feel as though an invasion of sorts is almost inevitable. Due to the increased attention being paid to Russia’s military action along its Western border, it should come as no surprise that precious metals were seeing support from safe-haven buying for the first time in a few weeks. On top of that, Russia responded to sanctions instituted by the West by imposing its own sanctions on EU and US food products. As recently as yesterday, Russia announced that it would be imposing sanctions on agricultural products being shipped from EU and US suppliers. Though many analysts feel as though these sanctions will hurt Russia more than it hurts any of the countries whose food will not be able to be imported into the country, Vladimir Putin is showing the world that he will not simply stand by and allow Western nations to bully him economically.
As investors look forward to the weekend, it is already clear that they will be continuously focusing on the situation in Russia. Today, the European Central Bank is meeting for their most recent policy meeting, and it is almost a certainty that they will be discussing what Russia’s actions may mean for the EU economy sometime down the road.