Gold, oil and silver prices jump as Putin invades Ukraine

Global equities dropped sharply on Thursday as investors reflected on the latest invasion of Ukraine by Vladimir Putin. In Asia, the Nikkei 225, Hang Seng, and Shanghai composite declined by more than 2%. In Europe, the DAX and CAC 40 indices declined by more than 4% while the FTSE 100 fell by 2.5%. Meanwhile, in the United States, futures tied to the Dow Jones, Nasdaq 100, and S&P 500 declined by more than 2%. Other assets like cryptocurrencies declined, with Bitcoin crashing below $35,000. 

Gold, silver, and crude oil prices soared after the invasion happened. Gold jumped to the highest level since May 2020 while crude oil crossed the key resistance at $100 for the first time since 2014. Gold rose as investors rushed to safe havens while oil prices rose as investors waited for new sanctions on Russia. The situation worsened after Vladimir Putin announced that he was sending his military to Ukraine in a special operation. He claimed that the operation’s goal will be to renew peace in parts of Ukraine. He also asked Ukrainian military officials to go back home. 

The US dollar jumped sharply against key pairs as the crisis in Ukraine unfolded. The closely-watched dollar index jumped by almost 1% as investors rushed to the safety of the greenback. Analysts believe that the crisis will lead to a higher cost of living because of Russia’s role in key areas. For example, it is a leading producer of crude oil and natural gas. Further, the US exports fertilizer worth more than $700 million every year. Russia is also a leading player in the wheat market, meaning that prices will rise. Therefore, there is a likelihood that the Federal Reserve will embrace a more hawkish tone.

EUR/USD

The EURUSD pair declined sharply as the Ukraine challenge escalated. It fell to a low of 1.1163, which was the lowest level since January this year. It managed to move below the key support level at 1.1292, where it struggled moving below earlier this week. On the four-hour chart, the pair moved below the 25-day and 50-day moving averages while the MACD moved below the neutral line. Therefore, the pair will likely keep falling in the near term.

XAU/USD

The XAUUSD pair jumped sharply as investors reacted to the ongoing crisis in Ukraine. It is trading at 1,968, which is significantly higher than last year’s low of 1,963. On the daily chart, the pair managed to move above the key resistance level at 1,877. It has moved above the 25-day moving average and even formed a golden cross. The Relative Strength Index (RSI) has moved above the overbought level. Therefore, the pair will likely keep rising as bulls target the key psychological level of 2,000.

XTI/USD

The XTIUSD pair jumped to a multi-year high as the Russian crisis escalated. It is trading at 99.15, which is a few points below 100. This is a remarkable price since it was at minus 38 in 2020. On the daily chart, the pair moved above the 25-day moving average while the accumulation and distribution indicator has been rising. Therefore, the pair will likely keep rising as the crisis gets worse.