Gold and silver are hovering around even for the day thanks to a few conflicting factors. Upbeat US economic news is battling with increased tensions in Ukraine for the attention of the market and as it stands, the US economic data is winning that battle. For the first time in months a positive report with regard to the US industrial sector was released, an event that triggered a surge in the value of the US Dollar.
On the other side of the world, violence across Ukraine’s eastern half has picked up in recent days and is increasingly catching the attention of the world. Russia has remained quiet on matters over the course of the past few days, but many are awaiting how they respond to the military of Ukraine taking armed action against pro-Russian demonstrators and militiamen.
US Sees Rise In Industrial Production
Industrial production for the month of March was reported as being up .7%, meaning that February and March combined saw an increase in industrial production of nearly 3%. Despite the fact that most market analysts were expecting to see industrial production rise by somewhere in the neighborhood of .5%-.7%, it is a surprise in its own right to see a piece of US economic data meet and even slightly exceed expectations.
The better economic data only worked to boost a US Dollar which has been on the up and up recently. Of course, as you might have expected, the improved US Dollar is only making it more difficult for spot gold and silver to make gains.
Ukraine Takes Military Action Against Militiamen
Since the beginning of last week, tensions across Ukraine have been on a steep path upward. Demonstrators and armed militiamen have been taking over buildings, towns, and other strategic locations across the eastern regions of the country. Up until yesterday, however, the armed militants have been met with little to no resistance.
In the city of Kramatorsk, Ukraine, militants even went as far as to take over command of a strategic airfield. That same airfield was flooded with members of the Ukraine military yesterday and is now back under the control of the government. Still, the unrest and violence across the eastern half of the country is beginning to grow at alarming rates. As Ukraine takes more military action against dissenters, the world is wondering how, or if, Russia will respond. There is no saying if Russia will intervene militarily or not, but it is unlikely that it will stand idly by while ethnic Russians are embattled with the Ukrainian military.
Though the crisis in Ukraine is clearly far from resolved, the ongoing anxiety and tensions are working to drive safe-haven demand for precious metals. Unfortunately, however, the stronger US Dollar as a result of upbeat industrial data is preventing the spike in safe-haven demand from making any lasting upward impacts on precious metals’ spot values. We will continue to watch the situation in Ukraine closely as it is changing shape with each passing day.