Gold – When the Russian Empire Strikes Back

Gold was volatile in 2014, mostly due to the unexpected Russian annexation of Crimea and other mischief it stirred up in Eastern Ukraine. The Russian Federation is paying a high price for its actions, on the economic sanctions levied against it by the United States and Europe. While Russia has responded to the harmful penalties applied to it by seeking new economic relationships and alternatives, especially with China, it has thus far mostly refrained from striking back directly at the west. When the Russian Empire finally does strike back, likely when it has significantly skewed its international trade away from the west, it could do significant harm to the euro and maybe even the dollar. That vengeful eventuality I see could send gold soaring to new all-time highs in the future. That would mark a stark contrast against this year’s performance for the SPDR Gold Trust (GLD), which is down 2.4%. If the GLD were to reach its all-time high again, which was marked intraday in 2011, it would mark 63% appreciation. See my report on Russia and gold here.

Precious Metals Relative Security	Year-to-Date Performance
SPDR Gold Trust (NYSE: GLD)	-2.4%
iShares Silver Trust (NYSE: SLV)	-16.7%
Sprott Physical Gold Trust (NYSE: PHYS)	-2.3%
Market Vectors Gold Miners (NYSE: GDX)	-12.1%
Market Vectors Junior Gold Miners (NYSE: GDXJ)	-25.7%
Direxion Daily Gold Miners Bull 3X (NYSE: NUGT)	-63.4%
Direxion Daily Gold Miners Bear 3X (NYSE: DUST)	-44.4%
Goldcorp (NYSE: GG)	-13.6%