Precious metals are still hanging in there on Wednesday, despite conceding some value early on. There isn’t much to talk about from an economic data standpoint this week, but there are plenty of geopolitical happenings catching the attention of worldwide investors. Among them are tensions between Ukraine and Russia as well as the continued fighting taking place on the Gaza Strip.
Tensions Have Eased, But Still Persist
Around this time last week, the spot values of precious metals were seen shooting upward in the wake of reports surrounding the crashing of a Malaysian Airlines Boeing 777. Shortly after news stories broke, it was then found out that Flight MH-17 was actually shot down by surface-to-air missiles originating somewhere over Eastern Ukraine.Because tensions in the region have been high for a majority of this year, it came as no surprise to see investors scrambling to get a hold of safe-haven assets such as gold, silver, the US Dollar, and US Treasuries.
With investors on edge as this week came to a close, most were thinking that the same uneasiness would carry over into this week. However, such was not the case due to a few interesting turn of events over the weekend. For one, the same pro-Russian separatists who are allegedly behind the downing of Flight MH-17 have thus far wholly cooperated with early investigation efforts. Not only did the rebels hand over the victims’ bodies to authorities, but they also located and handed over the two flight recorders which were recovered from the wreckage. I think it is safe to say that most people expected the rebels to make the investigation process as difficult as possible, but things have gone along rather smoothly up to this point. As a result of this weekend’s cooperation by the separatists, investor uneasiness downticked considerably by midday on Monday. This limited interest in precious metals, which is why we have been seeing gold, silver, platinum, and palladium stagnating through the first half of the week.
Still, Israel and Hamas are squaring off in an intense and costly battle that has been going on for a week now. This, in conjunction with raised tensions between the US and Russia are keeping investors on their toes. It will be interesting to see if the violence in the Middle East continues through the end of the week, or if continued efforts at achieving a ceasefire finally reach a breakthrough.