Dec 8, 2021 – Normally an asset that rallies if it senses risk of significant uncertainly or upheaval, gold has remained relatively calm throughout the increasing tensions between the US and Russian over Ukraine. The West has been accusing Russia of massing troops, albeit within Russia’s sovereign borders, with the intent of invading the Donbas region. Russia vehemently denies the accusations, and has countered with claims that the US is deliberately provoking Russia and seeks to ultimately bring Ukraine into NATO, which is a red line for Russia.
Adding more fuel to the fire, a GOP senator who sits on the Senate Armed Services Committee said in a Fox News interview, while commenting on Tuesday’s Biden-Putin virtual talks, he won’t rule out a major American ground war with Russia. Even more shocking Senator Roger Wicker’s (Mississippi) suggestion that the United States should not rule out “first-use nuclear action” against Russia in the event Moscow threatens Ukraine with a military offensive.
The reaction by the ultimate safe-haven, gold, has been one of indifference. Is gold telling us this is all just bluster, meant to distract from the real issues and problems that the administration and Fed are incapable or unwilling to fix? Or is gold wrongly complacent this time? We will be watching our quote screens in the days ahead for an answer.