Gold has perked back up following the weekend’s dramatic developments in Russia as investors seek out the precious metal’s safe haven appeal once again.
Just days after looking set for a period of steady decline as the bearish factors for gold outweighed the bullish ones, uncertainty over how the Ukrainian war will now play out and the prospect of an internal battle within Russia have sharply reversed gold’s fortunes.
How long-lasting this boost to the gold price proves will be determined by how widespread the butterfly effect of the aborted rebellion by Yevgeny Prigozhin’s Wagner Group turns out to be. If this proves to be the beginning of the end for President Vladimir Putin’s totalitarian control on Russia, then the resultant uncertainty is likely to keep gold supported in the medium-term with investors wanting to keep some risk off the table.
One other factor to consider during this focus on Russia is the country’s importance to supplies of physical gold with the country the world’s second largest producer of the metal. While there is no suggestion at this point that production and exports will be impacted, it is worth keeping in the back of investors’ minds as it could prove one of the rare occasions where fundamental factors do influence the gold price should that situation change.
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