Gold News

Gold Swings Below $2000 as China Buys, Russia Sees 'New World War', $100bn Withdrawals Hit FRC

GOLD PRICES rallied from another swift drop in terms of all major currencies Tuesday lunchtime in London, bouncing but then slipping again to trade $15 below $2000 per ounce as new data said China's consumer demand to buy gold rose in the first quarter while mid-tier US bank First Republic was hit by $100 billion of depositor withdrawals.
The head of the United Nations and a senior Kremlin official both said the world faces a genuine risk of major-power conflict as Russia's invasion of Ukraine met what some analysts believe to be the start of Kyiv's spring counter-offensive.
With gold trimming its 0.9% rebound from an earlier low of $1976 after briefly topping $2000 per ounce at the start of Asian trade overnight, silver prices shot higher from a sudden spike down to 3-week lows of $24.50, rebounding but failing to regain the $25 level.
Platinum prices fell further from Friday's 13-month highs before rallying $10 to trade back at $1080, while sister autocat metal palladium erased all of last week's 9.3% spike to dip through $1500 per ounce.
"Rising interest rates are worrying depositors that small- and mid-sized lenders are going to be facing increasing difficulties," Reuters quotes one US macro-economist as shares in First Republic (NYSE: FRC) opened the day lower by 1/5th after releasing its earnings report for Q1, when US peers Silicon Valley and Signature Bank collapsed and Swiss giant UBS took over failing competitor Credit Suisse.
"The risk is that the cost of emergency funding proves too expensive for the smaller banks."
Chart of FRC share price vs. gold Comex continuous contract, last 5 years. Source: Google Finance
"Benefiting from the increase in safe-haven demand, [China's] consumer demand for gold bars and coins has achieved substantial growth," said Beijing's government-mandated China Gold Association today, reporting an annual rise of 20.4% in first-quarter gold retail-investment product purchases while demand to buy gold jewelry between January and March – consistently the No.1 gold consumer nation's busiest period thanks to the Lunar New Year holidays and gift-giving – rose 12.3% from the first 3 months of 2022.
"Tensions between major powers are at historic highs. So are the risks of conflict through misadventure or miscalculation," said UN Secretary-General Antonio Guterres on Monday, joining the US, UK, French and Japanese ambassadors to the United Nations in condemning the Kremlin's invasion of Ukraine at a session on "Effective Multilateralism" led by Moscow's foreign minister Sergei Lavrov as Russia assumed the rotating presidency of the 15-member Security Council in New York.
"World tensions are white-hot...quite probably on the verge of a new world war," said former Russian president and prime minister Dmitry Medvedev, now deputy chairman of the Kremlin's security council, at a conference in Moscow today, warning that Russia won't shy away from using nuclear weapons against acts of "aggression". 
Medvedev last month threatened to fire hypersonic missiles at the International Criminal Court in The Hague after it issued arrest warrants for President Putin and Russia's commissioner for children's rights Maria Lvova-Belova over the kidnap and deportation of minors from Ukraine.
With complaints from Kremlin supporters over Russia's battlefield tactics continuing as Ukrainian forces launch "three probing attacks" across the Dnipro River towards Crimea, Ukraine has also apparently flown drones over central Moscow while attacking Russia's Black Sea Fleet with surface drones in Sevastopol.
Russian mercenary force Wagner – reportedly burying hundreds of casualties from Ukraine in Siberia as some of its ex-convict troops are accused of murder and mayhem on returning to their home-towns with an official pardon – yesterday blamed troops from energy giant Gazprom's private army Potok for abandoning their positions in fierce fighting around the devastated eastern Ukraine city of Bakhmut.
With the Dollar rallying as world stock markets slipped ahead of this week's US GDP and inflation data releases, the gold price in Euros rallied back above €1800 per ounce and the UK gold price recovered the £1600 level.
Beijing's communist dictatorship today said it will prosecute a Taiwanese citizen it arrested last year for promoting "separatism" and "secession".


Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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