Precious Metals See a Historic, Volatile Week

 It was both a historic a historic week for gold as the Russian invasion of Ukraine continued to escalate, sending shockwaves throughout global markets. By Monday, reports were surfacing that multiple Western countries were taking into consideration a ban of Russian oil imports. The West had already levied a variety of sanctions on Russia but had previously stopped short of oil imports.

Uncertainty stemming from the conflict, coupled with rumors of additional sanctions, weighed heavily on U.S. equities upon Monday’s open. The S&P 500 had its worst trading day in over fifteen months, falling 3%, while the Dow Jones entered correction territory. Gold started the week near $1,988, but was little-changed by Monday’s close, near $1,995 an ounce. Meanwhile, silver started the week close to $25.95.

With soaring global commodity prices and higher inflation fueling global growth concerns, investor sentiment continued to favor safe-haven assets as the week progressed. This meant a dollar uptick and gold surge on Tuesday with a rare tandem gain for the pair.

On Tuesday, gold jumped by 4.3% to its weekly high of $2,069. Gold was last above $2,000 in August of 2020. On the same day, silver surged by 5.9% on its way to a weekly peak of $26.88. However, the commodities rally had a clear leader on Tuesday, with nickel jumping by more than 65%. Nickel prices have surged following the Russian invasion of Ukraine, as Russia is a major supplier of the metal.

In addition to the metals rally, energy also pushed higher on Tuesday. WTI crude surged by nearly 8% as President Biden announced a U.S. ban on Russian oil imports. Previously, Russian oil accounted for less than 8% of U.S. oil imports.

Gold prices corrected from overbought territory on Wednesday, shedding 3.4% on its way to $1,985. Silver also plummeted, losing over 4.2% before settling closer to $25.65 by the end of trading Wednesday. While metals fell, stocks in the U.S. saw gains on Wednesday. The S&P 500 surged by 2.8% while the Nasdaq Composite gained 3.7%, which brought the index out of bear market territory.

On the same day, President Biden signed an executive order which urged federal agencies to examine regulations on cryptocurrencies. Biden also urged the government to research a digital version of the dollar. Following the order, Bitcoin prices saw a 9% gain. Some say the move to regulate the cryptocurrency market is bullish, as it may clear the path for greater institutional adoption.

Thursday saw the release of CPI data, which revealed a 7.9% increase in prices from one year ago. This marked the highest U.S. inflation since 1982. Following Thursday’s inflation data, gold once again crossed the $2,000 mark, while silver breached $26.

U.S. equities fell on Thursday, but futures were higher on Friday morning, as some reports surfaced indicating a potential positive shift in talks from Russian President Vladimir Putin. This news preceded a breather in the metals rally.

Along with equities, the U.S.10-year Treasury yield was higher, rising for its fifth consecutive day on Friday morning. Gold and silver were both lower Friday morning, as volatility continued to plague bullion. Despite gold reaching historic highs on Wednesday, gold is little changed at $1,981 as the week closes. Silver also saw little weekly change, as it is currently hovering near $25.80 an ounce.