Gold price holds $1,900 as Biden announces first tranche of Russia sanctions
(Kitco News) - The gold market is relatively calm as investors digested the West's reaction to escalating Russia-Ukraine tensions with U.S. President Joe Biden's announcement of the first tranche of sanctions against Russia.
Tensions escalated on Tuesday as the West reacted to Russian Vladimir's Putin announcement recognizing two self-proclaimed republics in eastern Ukraine and ordering troops there as "peacekeeping forces."
In response, U.S. President Joe Biden said he is releasing the first tranche of sanctions against Russia, which will target Russian banks and sovereign debt.
"Today, I am announcing the first tranche of sanctions to impose a cost on Russia in response to their actions yesterday. We'll continue to escalate sanctions if Russia escalates. We are implementing full blocking sanctions on two large Russian financial institutions VEB and military bank. We are implementing comprehensive sanctions on Russia's sovereign debt. That means we've cut off Russia's government from Western financing," Biden told the press on Tuesday. "Starting tomorrow, we'll also impose sanctions on Russia's elites and family members."
Earlier in the day, Germany announced that it is halting the certification process of the Nord Stream 2 gas pipeline from Russia. On top of that, the EU has imposed sanctions on most members of Russia's Duma while also banning purchases of Russian government bonds and new Russian debt.
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Biden described Russia's actions as "the beginning of Russia's invasion of Ukraine" and warned that if tensions escalate further, so will the sanctions. "We still believe Russia is poised to go much further and launch a massive military attack against Ukraine," Biden said.
Gold remained steady in response to the sanctions, trading around the $1,900 an ounce level. April Come gold futures were last at $$1,902, up 0.12% on the day.
Analysts are projecting more gains for gold as Russia-Ukraine tensions mount on the geopolitical front and investors look for protection.
"Bullion seems like it is taking a little break right now, but investors will soon be saying, 'I love goldgold' as geopolitical and growth concerns will drive safe-haven demand," said OANDA senior market analysts Edward Moya. "Gold has tentative resistance at the $1,920 level, but beyond that lies the $1,950 area."