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I Wish Gold Was A Sunny Day Investment

Yesterday’s horrendous news of the downing of Malaysian flight MH17, claiming 298 souls, allegedly by pro-Russian rebels in the Ukraine, refocused the world on the continued escalation of geopolitical tensions in Eastern Europe. The atrocity will again ramp up tensions between the West and Russia, and one would hope that this may be the catalyst for a negotiated agreement between the pro-Russian rebels and the Ukraine government. Gold is sometimes the investment of the catastrophic and yesterday’s event caught a quiet, thin market unprepared, with funds rushing into gold, as the safe-haven bid against the unknown. Once it was determined that this was not a direct action taken by Russia itself, gold retraced some of its gains overnight. Equity markets, first in Europe, and then in North America, also reacted negatively as investors, when unsure, tend to push the sell trigger. Gold will need to hold the $1,307 level to maintain bullish integrity, but I assume traders will not go home short given yesterday’s events, along with the possibility of more aggressive issues between Hamas and Israel.

By Peter Hug
Global Trading Director
Kitco Metals Inc.

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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