Gold weakens further after yesterday’s rocket launch and harmless fall to the sea
What was behind the rapid rise and fall?

(USAGOLD – 2/25/2022) – Gold weakened further this morning after yesterday’s rocket launch, which took the price to over $1970 before it fell harmlessly to the sea. It is down $13 at $1892 in early  trading. Silver is down 14¢ at $24.15. Those perplexed by gold’s fickle run over the past two days might find the beginnings of an explanation (and some solace) in John Auther’s Bloomberg column this morning:  A war that is increasingly looking more like a blitzkrieg than a lengthy war and soft sanctions unlikely, at least for now, to radically boost energy prices and inflation expectations.

Gold price
(Five-day)

Chart courtesy of TradingView.com

He quotes Columbia University’s Adam Tooze as saying: “President Biden announced a sanctions package against Russia that is specifically designed to allow energy payments to continue! What kind of sanctions are those?… These are sanctions designed not to sanction.” When the reality sunk in, gold, the bond market, and oil tracked back quickly to where they began the day.

All said, Authers does warn that Ukraine might not be the end of Russian ambitions and offers a recommendation likely to resonate among our readers: “It might be best to take Thursday’s extraordinary rally [in stocks] as an opportunity to take a few profits and allocate something to cash or gold. Some insurance during a situation that is very dangerous seems like a good idea.” In our many years reading Auther’s columns, we do not remember him ever making an outright recommendation to buy gold.