Spot gold and silver are trading significantly higher on Wednesday as safe-haven buying and the overall outlook on precious metals continues to improve. Tensions in the Crimea region of Ukraine continue to rise as video and eyewitness reports are claiming that pro-Russian forces are moving further into the disputed region.
US economic data for this week is light which means that investors are already beginning to speculate with regard to the outcome of next week’s FOMC meeting.
Tensions In Ukraine Fueling Demand For Gold And Silver Again
After the world witnessed a sudden and rapid deescalation of tensions in the southern Crimea region of Ukraine last week, it was looking increasingly like this entire crisis would be resolved through diplomatic means. Unfortunately, however, that belief was quickly dealt a blow over the weekend after a mounting number of reports indicate that pro-Russian militias are moving further into the region via helicopter, armored vehicle, and by foot. Along the way there have been numerous reports of these same forces storming specific buildings and compounds and subsequently ushering the occupants out. Though there have been no reports of gunfire or widespread violence, the tensions alone are palpable.
In only 5 days’ time the citizens of Crimea will take part in a referendum, or vote, to decide whether the majority of people in Ukraine wish to remain part of Ukraine or rejoin the Russian Federation. Last week the parliament of Crimea voted unanimously to rejoin Russia and it is expected that the referendum will yield similar results. Though president Barack Obama and a number of other world leaders have condemned Russia’s supposed influence and hand in the matter, it is looking more and more like Crimea will soon be the newest addition to the Russian Federation.
The increased military presence and threat of violence in the near future is driving the spot values of gold and silver upward as investors once again are seeking safe-haven assets. After declining slightly towards the end of last week, spot gold and silver have rebounded early today and now see spot gold hovering near a half-year high. Only time will tell if these gains can be sustained, though it is becoming increasingly difficult to argue with the notion that precious metals are moving themselves into a more favorable position for investors.
In other news from around the world, there were mixed economic reports released out of the EU in the early morning hours, though none of it had any major impact on the worldwide marketplace. Recent EU data has been upbeat and is falling in line with projections that see EU economic growth beating out most other regions of the world this year.