Russia’s War on the Dollar Serves Gold

Russia’s incursion into Ukraine caused a rift between Russia and the U.S. & Europe. It led the West to issue sanctions against Russia and to threaten to apply deeper cutting actions. Russia recognizes the damage the West can do to its economy today, and so our former cold war foe has begun to take action to protect itself. Its actions include the acquisition of gold reserves replacing U.S. Treasuries, and also the use of other than dollar currencies in its and its businesses’ trade settlements. Russian actions may work against the euro and the U.S. dollar, but they should serve gold; because the shiny metal will always be the one currency that has credibility globally, even when the world is not at peace. Thus, despite concerns I’ve expressed recently regarding a capital flow weight against gold and relative securities, this Russian reality offers a solidifying new support against that for gold and the SPDR Gold Trust (NYSE: GLD). See the full version of this report published at Seeking Alpha and titled Russia’s War Against the Dollar will Support Gold Long-Term.

Precious Metal Relative Securities	YTD	TTM
SPDR Gold Trust (NYSE: GLD)	+4.5%	-9.4%
iShares Silver Trust (NYSE: SLV)	-1.3%	-12.8%
Market Vectors Gold Miners (NYSE: GDX)	+9.0%	-20.8%
Direxion Daily Gold Miners Bull 3X Shares (NYSE: NUGT)	+13.5%	-70.6%
Sprott Physical Gold Trust (NYSE: PHYS)	+4.8%	-9.5%