August 6th Midweek Gold Market Update

Precious metals have made massive gains through the first half of the day on Wednesday, fueled by growing fears with regard to the situation in Ukraine. Compared to last week, this 5-day trading session is shaping up to be a great deal quieter. There simply isn’t very much economic data on this week’s slate, and this may not bode well for US equities. That said, US equity markets are doing OK as of the writing of this post.

In case you missed it, last week brought about a good bit of economic data from the United States. On Wednesday, it was reported that the United States’ second-quarter GDP grew by 4% on an annualized basis. This number greatly exceeded the expectations of polled market analysts. After the GDP data was made public, all eyes then turned to the release of July’s employment report. Unfortunately, expectations which held that 230,000 jobs were added to the US economy in July were not reached. Instead, the actual figures showed that only 209,000 new jobs were added to the economy a month ago. This news caused precious metals, at least for a day, to gain some value. Despite the first two days of this week being none too favorable for precious metals, it is clear to see that the tide is turning, perhaps as a result of increased tensions throughout much of Eastern Ukraine.

Russian “Invasion” of Ukraine a Fear for Investors

Since the beginning of this week, the investing world has begun paying more attention to the crisis in Ukraine, specifically because Russia’s military was seen massing just over the country’s Western border. As of now, Russia has announced no plans for an invasion of Ukraine, but many people think that it might happen under the pretext of it being a “humanitarian” mission. As it stands, Russian troops have not crossed over the border, but the world is continuing to watch, expecting something to happen in the coming days.

As of now, gold and silver have been given a decent boost as a result of increased attention being paid to the crisis in Ukraine. This price action is being welcomed with open arms after the last month or so yielded nothing but bad news for precious metals.

As we head into the latter part of the week, it will be interesting to see what direction the tensions in Ukraine head in. Violence in the country has already been intensifying over the last few weeks, and it is looking like things will only get worse before they get any better. That said, so long as the market remains focused on the violence raging around the globe, the spot values of precious metals are likely to continue trending upward.

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