Gero: Ukraine Crisis Could Send Gold Prices Higher

Release Date: 
Friday, April 25, 2014

Gold and Silver Prices

Gold prices moved higher on a late week rally due to rising tensions between Russia and Ukraine. “Gold is higher on safe-haven buying interest in early U.S. trading Friday, and on follow-through strength from Thursday’s gains. Prices have pushed back above the key $1,300.00 level…Ukraine’s military has taken action against pro-Russian separatists, killing several of them. In turn, Russia has mobilized its troops near the Ukraine border...This situation is now a geopolitical flashpoint in the eyes of the market place.” (“Gold Rallies On Safe-Haven Demand Heading Into An Uncertain Weekend,” Kitco News, 4/25/14.)

Gold finished the week at $1,304.80, up $9.20. Silver prices closed up $0.08, at $19.83.

Gero: Ukraine Crisis Could Send Gold Prices Higher

Precious metals strategist, George Gero told CNBC ongoing tensions in Ukraine could send precious metals prices higher. “‘One of the largest suppliers of gold, and of course platinum, is Russia,’ said George Gero, precious metals strategist at RBC Capital Markets. ‘And if they're going to be involved in sanctions, and more problems with Ukraine, and deliveries are curtailed—and there is already a problem in South Africa between the miners of platinum, palladium and the mining companies—all of that could somehow explode on the upside and curtail deliveries, meaning higher prices.’” (“Crisis in Ukraine could ‘explode’ gold: RBC expert,” CNBC, 4/24/14.)

China Begins Funneling Gold Imports via Beijing

The South China Morning Post, China’s oldest English language newspaper, reported on the People’s Bank of China’s decision to import gold via Beijing, a move that will limit public information on China’s gold purchases.

“The mainland has begun allowing gold imports through the capital, sources familiar with the matter said, in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves. The opening of Beijing as a third import point after Shenzhen and Shanghai could threaten Hong Kong's pole position in the mainland's gold trade, as the country can get more of the metal it wants directly rather than through a route that discloses how much it is buying. The mainland does not release any trade data on gold. The only way bullion markets can get a sense of its purchases is from the monthly release of export data by Hong Kong, which supplied US$53 billion worth of gold to the mainland last year.” (“China opens Beijing to gold imports, cutting into Hong Kong's transit role,” South China Morning Post, 4/21/14.)

Analysts Survey Sees Higher Gold Prices Next Week

“Concerns about potential escalation in the situation between Ukraine and Russia, plus a move back above certain technical chart levels, should support gold prices next week, a majority of participants said in the weekly Kitco News Gold Survey. Twelve [out of nineteen respondents] see prices up, while four see prices down and three see prices sideways or unchanged. [S]everal survey participants said they are erring on the side of caution and calling for higher prices next week.” (“Higher Gold Prices Seen In Weekly Survey,” Kitco News, 4/25/14.)

Goldline’s Express IRA℠ Program

Many Goldline clients choose to include precious metals as part of their retirement planning especially during times of economic crisis and uncertainty.* Goldline’s Express IRA℠ allows clients to acquire precious metals on their schedule; they no longer have to wait for your self-directed IRA to be funded before getting started.

Goldline's Express IRA℠ not only provides clients with the ability to diversify their IRA on an expedited basis, clients can also qualify for Goldline's ground-breaking Two-Way Price Guarantee Program℠ when they acquire $10,000 or more of our exclusive bullion coins. When an Express IRA purchase qualifies for Goldline's Two-Way Price Guarantee Program℠, clients are protected on short-term upside and downside market movement: they can either call to reprice their coins if the selling price falls (up to a maximum of 28 days depending on the size of the purchase) or, if the selling price of the coins increase during the qualifying period, clients can call Goldline to acquire additional coins at the original selling price.

Goldline provides a wrap-up of the week's precious metals news along with important commentary on the American Advisor Week in Review audio program. Listen to the show below:

*Federal IRA tax laws are complex and may change from year to year. Goldline believes it is appropriate to have 5%-20% of retirement portfolio allocated to precious metals. Other individuals and institutions may recommend different percentages. As with any investment, you should consult your tax advisor before making a decision regarding precious metals IRA investments.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage.

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