Gold Market Wire
News, analysis and commentary for gold traders and investors
Crude Oil and Gold Market Update
All Eyes on Crude Oil as War in Ukraine Begins
February 24, 2022 - (Gold Market Wire) - Gold and Crude Oil have risen sharply as Russia begins an all-out invasion of Ukraine. Right now the markets are focused on Crude Oil which, unsurprisingly, has gone vertical.
The energy complex has gone on a tear, and is now entering a new era where war premium will continue to keep prices high for months, if not years. What will the "Greens" have to say about that? Russia, who produces some 10 million barrels per day of Crude Oil will likely cut exports as they build reserves for military use. Wars take a huge incremental amount of oil to conduct, and the Russian military will doubtlessly be sequestering production for itself.
What a time for Germany to inhibit its energy imports, defund nuclear power and allow their economy to be run by "Green" interests that have failed to create atruly alternative form of energy. The German economy will suffer greatly, as the DAX has shown in the past few days by falling some 10%.
As for the Precious Metals, they are far more muted in their reaction.
Interestingly, the US Dollar is becoming the "safe-haven" asset in the fx world. The lack of a credible EU military has now revealed the vulnerability of Brussels' flag-ship project, the Euro, to military considerations. Currencies need to be backed by something tangible, as the saying goes...and there is nothing more 'tangible' than a strong, functioning military.