Hot week for precious metals: ⭐ Gold hit a new record as it reached $2,068 an ounce on Tuesday before dropping below $2,000 an ounce. ⭐ Palladium hit a record high of $3,440.76 on Monday, driven by fears of supply disruptions from top producer Russia, and then fell below $3,000 an ounce as global shares rallied following a retreat in oil prices.
The price moves come with mounting fears about the invasion of Ukraine, and after the London Bullion Market Association (LBMA) suspended the membership of six Russian precious metals refiners.
Among other metals, spot silver fell 1% to $25.47 per ounce, while platinum shed 1.2% to $1,062.84 on Thursday.
The STOXX index of European banks has fallen 15% since Russia’s invasion of Ukraine on Feb. 24, making banking one of the worst-performing sectors in the region. (Reuters)
"European growth will take a hit, so will European banks exposed to Russia - that's one of my biggest concerns," Eric Theoret, global macro strategist at Manulife Investment Management, said.
One thing is certain: E.U. inflation will be pushed even higher. “Energy prices and inflation will be pushed higher, while growth will weaken,” said Dirk Schumacher, an ECB watcher with Natixis. (CNBC)
Inflation in the Eurozone was 5.1% in January and went up to 5.8% in February as energy prices soared amid the military escalation from Russia.
Read our SPOTLIGHT to learn how high inflation can affect global markets and the price of gold.
Oil dropped 12% on Wednesday in the worst day since November as the wild ride triggered by Russian supplies disruption continues. (CNBC)
WTI crude oil fell more than 12%, or $15, to settle at $108.7 per barrel, recording its worst day since Nov. 26.
Crypto update: U.S. President Joe Biden signed an executive order on Wednesday calling on the government to examine the risks and benefits of cryptocurrencies. (CNBC)
The measures target six key areas: consumer protection, financial stability, illicit activity, responsible innovation, U.S. competitiveness, and financial inclusion.
As details from the executive order leaked overnight, the price of bitcoin increased almost 9%. Bitcoin's price was $41,910 Wednesday evening, according to CoinDesk.
Read our SPOTLIGHT to learn how gold and bitcoin can act as complementary assets in an investment portfolio.
Many investors still instinctively buy the dips in the market. But given the current situation in the market, “BTD” (Buy The Dip) could be short for “Burning Trillions (of) Dollars,” warns Mohamed El-Erian. (Bloomberg)
“The key question in the runup to the invasion of Ukraine was whether Russian President Putin could find a face saving way to de-escalate. He couldn’t. The key question today is whether he is willing/able to find an off-ramp from an invasion that’s not going according to his plans and is resulting in horrible atrocities and human tragedies,” El-Erian wrote.
What else is happening
The U.S. ban on Russian oil imports, more than 2 million refugees, and failed ceasefires mark the second week of the war in Ukraine. (CNN)
A deadly Russian bomb attack on a maternity hospital in Mariupol, southern Ukraine, has sparked international outrage.
Ukraine’s president called the attack the “ultimate evidence of genocide” and warned millions more may die if bombing isn’t stopped.
Read our SPOTLIGHT to learn how geopolitical tensions could impact the gold price.
While there are alternatives to Russian oil, they would be insufficient or logistically difficult if the U.S. and its allies were to ban Russian energy imports, analysts said on Tuesday. (CNBC)
KPMG’s Regina Mayor said: “There are other sources of oil supply. It’s just really questionable about how quickly they can come online, the logistics of getting them to where they’re actually needed.”
🏅 A lucky treasure hunter discovers a rare 14th-century gold coin in Norfolk, England. (The Smithsonian Magazine)
The leopard florin coin was minted in 1344 and is one of just five of its kind known to survive today.
See you next week!