Gold prices remained above $2,000 per ounce Tuesday while investors kept seeking out the precious metal, considered a haven asset, and Goldman Sachs overnight pushed up its gold price projections after Tuesday's highest prices seen since the summer of 2020 due to volatility over the crisis between Russia and Ukraine.
However, the surge in prices may not be all good news for Russia, which has a stockpile of a reported $130 billion in gold. A bipartisan group of lawmakers is pushing legislation that will block Moscow from liquidating those reserves to fight back against sanctions that have locked down the country's economy, reports Axios.
That would hit Russia hard, as the country has been adding heavily to its reserves as of Feb. 28, four days after the invasion of Ukraine began.
Gold was at $2,019 in early trading, up by 1.2%, for an increase of 10.4% to date, reports Barron, quoting FactSet.
The company changed its price projections based on increased demands from consumers, central banks, and investors because of the economic uncertainty surrounding Russia's invasion of Ukraine, notes the financial publication.
The bank has also changed its six-month projection to $2,500 per ounce, up from $2,050, and is keeping its 12-month horizon at $2,500 per ounce, up from $2,150 it was set at previously.
Meanwhile, global gold prices made the unexpected jump early Tuesday following a surge in Egypt, reports The Egypt Independent, reaching record levels of $2,026.50 per ounce, with spot transaction prices reaching $2,020.97.
According to the Brookings Institution, as of January, Russia was holding $130 billion in gold. However, beginning on Feb. 28, four days after Russia invaded Ukraine, it started to buy gold again for the first time since 2020, when it stopped buying gold when prices spiked at the beginning of the pandemic, reports Bloomberg, quoting a press release from the Bank of Russia.
The worldwide sanctions, which are still growing, have frozen Russia's foreign exchange assets, but a loophole could allow the country to liquidate its gold holdings, reports Axios.
The bill, introduced by Sens. Angus King, I-Maine; John Cornyn, R-Texas; Bill Hagerty, R-Tenn.; and Maggie Hassan, D-N.H.; calls to apply secondary sanctions against American entities knowingly transporting gold from the Russian central bank holdings or selling gold either by electronic means or physically in Russia.
"Russia's massive gold supply is one of the few remaining assets that Putin can use to keep his country's economy from falling even further," King said in a statement. "By sanctioning these reserves, we can further isolate Russia from the world's economy and increase the difficulty of Putin's increasingly-costly military campaign."
Cornyn, meanwhile, accused Russia of having "taken a page out of Venezuela's book by exploiting a loophole in current sanctions that allows them to launder money through the purchase and sale of gold."
Gold prices reached the $2,000 per ounce level on Monday before dipping again after investors banked on the security of the metal over the Ukraine crisis. Fears of supply disruptions also sent palladium to an all-time high.
Spot gold went up by 0.9% to $1,986.83 per ounce, dropping slightly after reaching $2,000.69 earlier in the day. U.S. gold futures, meanwhile, went to $1,992, up by 1.3%.
The price of palladium went to $3,130.16 per ounce, up 4.3% after its all-time high of $3,172.22 earlier in the day, based on concerns over the metal, which automakers use in catalytic converters for emissions control. About 40% of the global production of the metal comes from Russia.
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