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Putin's 'Terrifying' Move on Ukraine Sees Gold Bullion Hit 9-Month High

GOLD BULLION rose to 9-month highs against a strong US Dollar on Tuesday as crude oil jumped towards $100 per barrel after Russia's President Putin recognized two 'breakaway' regions of neighboring Ukraine and then sent in troops to "secure peace" in a repeat of 2014's annexation of Crimea.
The news saw gold bullion reach its highest price since late-May 2021 overnight at $1913 per ounce.
With spot bullion in London then retreating the $1900 level, 12-month futures on New York's Comex exchange offered sellers more than $30 more per ounce.
Global stock markets sank but then crept back up, with the EuroStoxx 600 index erasing a 1.9% loss to trade virtually flat for the session by late-afternoon in Frankfurt.
"Putin has delivered the most terrifying speech geopolitically of the 21st century," tweeted one US foreign-policy consultant.
"The 1930s in full swing," says a German foreign policy analyst, referring to the Soviet annexation of eastern Poland in September 1939, an event last year called "a campaign of liberation" by Russia's foreign ministry.
Germany responded by suspending the controversial Nordstream 2 gas pipeline, the 27 European Union member states discussed targeting all the politicians in Russia's Duma who voted for the recognition last week – plus Russian banks now financing military operations in Ukraine – while the UK added 3 businessmen and 5 banks to its existing financial sanctions list.
UK opposition leader Keir Starmer called for stronger action, blocking Russia from the international SWIFT payments system.
"We are not going anywhere near hard enough today," said his fellow Labour MP and Chair of the All Party Parliamentary Group on Russia, Chris Bryant.
"In 2014, we were spineless in the end."
What sanctions the West did impose against Russia following Moscow's annexation of Crimea saw the Central Bank of Russia step in and buy gold otherwise blocked from international markets, boosting its own foreign-reserve assets whilst supporting the domestic mining industry.
Russia's gold bullion reserves were unchanged across 2021 as a whole, the first year of no growth since 2005.
Russia's annual gold mine output and central-bank buying. Source: BullionVault
With Russia now the world's No.3 gold mining nation and the 5th largest national central-bank owner, gold priced in the Ruble set a new all-time high on Tuesday as the currency sank on the FX market.
The Ruble then clawed back much of that initial plunge, rallying to 79 per Dollar after sinking to fresh 15-month lows below 80 on news of Putin signing the decree.
Russia's stock market also rallied hard after sinking over 10% at the open, with the RTS Index ending the session 2.1% higher.
Gold priced in the Euro meantime peaked near €1694 per ounce, just 3.1% below its record intraday high of August 2020, before retreating almost €27 per ounce only to rally again to €1680.
The UK gold price in Pounds per ounce whipped less violently as Sterling held steadier on the FX market, reaching a new 14-month high of £1409 before dropping 0.9% and rallying to £1402.
"[This] decision should have been made a long time ago," Putin said late Monday – "to immediately recognise the independence and sovereignty of the Donetsk People's Republic and the Luhansk People's Republic."
Tanks from Russia entered the regional capital of Donetsk within hours, according to Reuters.
"I wouldn't say that's a fully fledged invasion," the European Union's foreign policy chief said today, "but Russian troops are on Ukrainian soil."
Natural gas prices today jumped 10% in Europe's Dutch TTF market, taking April futures near 3-week highs, albeit 2/5ths below end-2021's spike.
Wholesale European electricity prices for day-ahead supply in contrast retreated from yesterday's 18% spike, easing back from Monday's 11-day highs.
Putin announced the move Monday in an hour-long monologue – widely called a "rant" and "unhinged" by Western media – preceded by what the BBC calls "a piece of theatre" with senior officials from the Kremlin's Security Council taking turns to accuse Ukraine of "genocide" against Russia speakers, and in which Putin humiliated the chief of his SVR foreign intelligence agency for proposing "one last chance" for the Western allies to negotiate.
"Ukraine is an inalienable part of [Russia's] own history, culture and spiritual space," Putin said in his televised address, much of which repeated historical claims and political aims he laid out in an article published last summer.
"Ukraine never had a tradition of genuine statehood,"
Back here in London, UK Prime Minister Johnson today insisted that today's sanctions were only "the first tranche, the first barrage of what we are prepared to do" against Putin and the Russian action in Ukraine.

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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