The escalating tension between Ukraine and Russia pushed gold prices up this morning. If the conflict is strung out, or worse, spirals into all-out warfare, precious metals will make an unexpected spike – and rather than 2014 being a year to buy gold, it will be a year to sell gold.
Russian President Vladimir Putin has deployed troops to Crimea and has ordered Ukrainian soldiers to stand down. In events that hark back to Hungary 1956 and the Velvet Revolution in the former Czechoslovakia in 1968, Russian might is threatening to undo the good work of campaigners to oust corrupt President, Viktor Yanukovych.
Putin has instated his intent to use force by declaring UN intervention is pointless. Meanwhile, the threat of US intervention hangs in the balance and revives the rivalry between the two great super powers of the 20th Century. Needless to say, any military engagement between the two nations will send gold prices sky-rocketing.
It’s early days yet, but traders are not taking any risks and invested in gold today. Prices for the yellow metal gained two per cent on the back of another month of growth in February. Considering gold bullion prices were forecast to fall in 2014, the precious commodity has already gained 13% this year!
The Ukraine-Russia conflict is just the latest influence that is effecting the stock market. Traders are really having a hard time of it at the minute. Fears over the recovery of the global economy restricted stock market dealers and kept precious metal prices on an even keel.
The potential threat of another full-scale war will delay the predicted fall of gold prices again. Money managers of investment banks have already upped their long-term gains on gold by 25% which suggests they do not expect a resolution to the Crimea dilemma any time soon.
Buy gold now or wait
As with professional traders, the decision for investors to add gold to their investment portfolio has become more complicated. Those waiting for a price drop are now faced with the dilemma to buy gold at its current price before it gets any higher or wait for a peaceful resolution in Easter Europe.
Gold and silver always perform well in times of economic crisis and if the trouble in the Crimea does escalate into warfare, there is every chance the US and other NATO countries will come to Ukraine’s aid. If things get that far, gold prices will spike and huge profits could be made.
If a satisfactory resolution is reached between political heads gold prices will remain around the $1330 an ounce mark and fall later in the year once economic data shows the global economy is recovering strongly. Analyst Robin Bhar of Societe Generale says gold prices could net significant profits for gold investors “in a matter of weeks” if you were to buy now.
Precious metals are certainly a safer investment than currency-based equities at the minute. Central banks are debasing their currencies to attract foreign investment and the Ukraine-Russia conflict will worsen the burden. To get the latest prices on gold bullion visit coininvest.com today and protect your financial future.