Gold Market Wire
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Russian Ruble Closes in on Major Resistance
May 24, 2022 - (Gold Market Wire) - As our remit here is Gold, and Gold is a currency (in many ways - or 'money' if you like), it behooves us to consider the FX implications that surround the world monetary order. Yes, the global monetary order is collapsing in dis-order, but few ever thought that the featured player would be a soaring Russian Ruble. This is the stuff of history.
Amidst the cries that Russia is losing over Ukraine, the salient fact is that, on the currency front, it is succinctly not losing. The upshot of this war has been nothing short of restorative to the Rubles much maligned fortunes of the past seven years. Not only are sanctions becoming more difficult to enforce, especially at the level of energy and food, the more fundamental, and disturbing aspect, to the Western powers, must be that a Russia cut off from the Western world seems to be re-casting itself as an auto-centric economic power powered by cheap abundant energy sources which it may use to create a self-sustaining economy, as well as an economy that, with the global shift in economic power from the United States to Asia in the past two decades, may have found a way to sustain itself, nay even thrive, without the economic interaction/beneficence of the western world. The Ruble is painting that picture.
This is a momentous juncture in world history, if such a trend continues, and we can see in the chart above that the Ruble is now encroaching on some pretty long-term resistance around 57.3. If we work under that we could be back at "pre-sanction" levels in short order. The next, disturbing question for Washington (and the world), will be, if the US is to maintain its hegemony in the world, especially vis a vis the Dollar - what, exactly will it have to do to challenge the Ruble'?
That may cast confrontation as inevitable.