It’s hard to imagine Vladimir Putin’s end game with regard to the Ukraine. Total capitulation and a governmental replacement with Russian management would certainly be his choice, but based on the Ukrainian response, that’s got no chance. What is known for sure is that London operates the largest bullion market on the planet, trading trillions of dollars in precious metals each year and that Russia is one of the world’s largest producers of gold and other precious metals. As of yesterday, its market participation at the London Exchange has been suspended “until further notice.” The commercial banks that handle Russian gold exports have also been hit with sanctions, which are limiting the country’s potential exports dramatically.
No time limit was put on the suspension and on the heels of sanctions imposed last week by the United States, United Kingdom, and European Union it is certain that the economic ramifications will not be conducive to a short term fix, even if an agreement is reached and relations were allowed to return to normal. Precious metal prices have risen and thousands of years of history indicate that due to current activities, the trend will continue. The current sanctions apply to gold and silver. Platinum and palladium from Russia has not yet been suspended, as of yet, but sanctions are being ratcheted up by world powers on a daily basis and with no end in sight, the damage already inflicted on the Russian economy is sure to be felt for an extended period.
The expense of conducting the Ukrainian War is costing Russia dearly and the sanctions being imposed have already made a shambles of its economy, tanked the Ruble vs. the U.S. Dollar, and curtailed normal Russian lifestyle, particularly due to the suspension imposed by Visa, Mastercard, and American Express. All of this will add to the decline of global GDP and to an increase of global inflation, which also benefits increased precious metal prices.
Gold touched its all-time high today before consolidating, but global complacency has suddenly been replaced with turmoil and concern. The doldrums that permitted precious metals to languish for years have been replaced with an incoming tide that seems likely to continue rising. Don’t miss the boat! The law of supply and demand is urging investors to take advantage of this difficult situation. If you’d like to add more gold and silver to your portfolio, or you’re new to owning gold and silver, please call the precious metal experts at American Bullion for personal assistance today, at (800) 531-6525.