What effects will Putin’s War have on the price of gold? 1 1

[RWB]

As of late last week Russia’s central bank held $630 billion in reserves, almost double what it held six years ago. The bank sold off US Treasury securities and bought gold with the proceeds. Russian reserves now hold 20% of their value in gold bullion, or about $126 billion.

In peaceful times, this could be sold for dollars, euros or yen and the money used to support the Russian economy or for other purposes. However, the financial sanctions imposed for invading Ukraine mean that no dollars, euros or yen can be sent to Russia, and no one will buy Russia’s gold. Thus, the $126 billion in gold reserves is valueless, and total Russian reserves are about $504 billion. Additionally, all of this remainder that is in American, Eurozone, or Japanese currency is also embargoed. Lastly, China, India an Saudi Arabia seem to be maintaining a “hands-off” approach. [Sources: Wall Street Journal, Washington Post, BBC.]

How do you think this situation will affect the market value of gold, if at all?

(Today's gold was $1,916.90 +1.22%)

Edited February 28, 2022 by RWB

[tj96]

I wish I had gold, then I'd be tracking this but I don't. 

I'm watching silver.  I have a lot of junk I'd like to dump when prices go through the roof!

[RWB]

Bloomberg Financial:

“Russia is simply unbankable at this stage and anyone holding Russian assets will find their book value marked at zero till we find a way out of this,” said Saed Abukarsh, chief portfolio manager at Ark Capital Management Dubai, Ltd. “The overall market is unprepared for the speed of developments since the inception of the war.”

[GoldFinger1969]

On 2/28/2022 at 4:00 PM, RWB said:

As of late last week Russia’s central bank held $630 billion in reserves, almost double what it held six years ago. The bank sold off US Treasury securities and bought gold with the proceeds. Russian reserves now hold 20% of their value in gold bullion, or about $126 billion.

In peaceful times, this could be sold for dollars, euros or yen and the money used to support the Russian economy or for other purposes. However, the financial sanctions imposed for invading Ukraine mean that no dollars, euros or yen can be sent to Russia, and no one will buy Russia’s gold. Thus, the $126 billion in gold reserves is valueless, and total Russian reserves are about $504 billion. Additionally, all of this remainder that is in American, Eurozone, or Japanese currency is also embargoed. Lastly, China, India an Saudi Arabia seem to be maintaining a “hands-off” approach. [Sources: Wall Street Journal, Washington Post, BBC.]

How do you think this situation will affect the market value of gold, if at all?

(Today's gold was $1,916.90 +1.22%)

UK Telegraph thought that Russia would dump all gold bars including the Czarist ones in their vaults.  Felt it could plunge 20% in coming days but instead Russia is a buyer.

Up $22 to $1,910 today.

I think Eastern Europeans will want a few gold coins rather than 1 BitCoin if they are worried about future incidents.

[Alex in PA.]

On 2/28/2022 at 4:00 PM, RWB said:

he financial sanctions imposed for invading Ukraine mean that no dollars, euros or yen can be sent to Russia

So solly to disappoint but Yuan, and Chinese held US Dollars, are flowing into Russia.  Also, what is J.B. paying for that Russian oil that we are now guzzling.  Monopoly Money??   

• China has criticized Western sanctions on Russia and said it will not follow suit, calling the measures "never a fundamental and effective way to solve problems” and saying it "always opposes any illegal unilateral sanctions."

[Alex in PA.]

On 2/28/2022 at 4:40 PM, GoldFinger1969 said:

I think Eastern Europeans will want a few gold coins rather than 1 BitCoin if they are worried about future incidents.

Agreed and they will not be the only ones.  When it comes to gold greed has no allies.

Edited February 28, 2022 by Alex in PA.
Spelling

[RWB]

On 2/28/2022 at 4:44 PM, Alex in PA. said:

So solly to disappoint but Yuan, and Chinese held US Dollars, are flowing into Russia.  Also, what is J.B. paying for that Russian oil that we are now guzzling.

Not according to Bloomberg's Asian markets.

The US produces more oil and gas than we can use, plus we have many capped wells awaiting use. We are net sellers and buyers only if it profits the US companies that produce domestic oil.

[Alex in PA.]

You lose.

The top five sources of U.S. total petroleum (including crude oil) imports by share of total petroleum imports in 2019 were - Canada 49% - Mexico 7% - Saudi Arabia 6% - Russia 6% - Colombia 4%

stated on August 16, 2021 in social media posts:

The U.S. is “now importing 800,000 barrels of oil from Russia,” but that could have been prevented if the Keystone XL pipeline hadn’t been cancelled.

[Alex in PA.]

On 2/28/2022 at 5:01 PM, RWB said:

The US produces more oil and gas than we can use,

That Political Administration is out now.  The new one is "Kerry Climate Friendly".  

[tj96]

[Alex in PA.]

Breaking News!  Greta Thunberg appointed US Energy Czar.  

[GoldFinger1969]

On 2/28/2022 at 4:44 PM, Alex in PA. said:

So solly to disappoint but Yuan, and Chinese held US Dollars, are flowing into Russia.  Also, what is J.B. paying for that Russian oil that we are now guzzling.  Monopoly Money??   

Urals Crude is selling $15 below Brent.  The Russian Discount may widen.

On 2/28/2022 at 4:44 PM, Alex in PA. said:

• China has criticized Western sanctions on Russia and said it will not follow suit, calling the measures "never a fundamental and effective way to solve problems” and saying it "always opposes any illegal unilateral sanctions."

Always good to know what the Wuhan Covid-19 Axis is thinking.......

[GoldFinger1969]

On 2/28/2022 at 5:01 PM, RWB said:

Not according to Bloomberg's Asian markets. The US produces more oil and gas than we can use, plus we have many capped wells awaiting use. We are net sellers and buyers only if it profits the US companies that produce domestic oil.

I am an energy analyst so this is my area of expertise. 

We are a net importer of energy/oil even though we do export refined products, propane, heavy Natural Gas Liquids (NGLs), and light sweet crude.

Capped wells (mostly DUCs, Drilled but Uncompleted) require more work to re-start than a traditional stripper well.  Shale is generally short-cycle but not that short !

We are net buyers of energy/oil but are a net exporter of natual gas, something we didn't expect 15-20 years ago.  

[GoldFinger1969]

On 2/28/2022 at 5:33 PM, Alex in PA. said:

You lose.

The top five sources of U.S. total petroleum (including crude oil) imports by share of total petroleum imports in 2019 were - Canada 49% - Mexico 7% - Saudi Arabia 6% - Russia 6% - Colombia 4%

stated on August 16, 2021 in social media posts:  The U.S. is “now importing 800,000 barrels of oil from Russia,” but that could have been prevented if the Keystone XL pipeline hadn’t been cancelled.

All of those are HEAVY OIL which our complex sophisticated crackers and refiners can handle.

Opening Keystone XL brings in heavy sulphur crude.  Otherwise, we have to get it from Russia and Columbia, since Venezuela is in the crapper. 

Edited March 1, 2022 by GoldFinger1969

[GoldFinger1969]

On 2/28/2022 at 5:43 PM, Alex in PA. said:

Breaking News!  Greta Thunberg appointed US Energy Czar.  

I think she only wants me to use my toboggan .....

[Coinbuf]

On 2/28/2022 at 3:01 PM, RWB said:

Not according to Bloomberg's Asian markets.

The US produces more oil and gas than we can use, plus we have many capped wells awaiting use. We are net sellers and buyers only if it profits the US companies that produce domestic oil.

Really, so why are we paying huge prices at the pump if this is true; you need to stop believing everything you see on CNN.

[tj96]

How did we get from gold to oil?

Oh, never mind.  It's black gold, Texas tea!!

[The Neophyte Numismatist]

I feel very fortunate that the half cent market will not be directly impacted.

On a serious note:  I think the gold market will continue to have some upward mobility, especially as equities continue to gyrate with uncertainly in Ukraine.  

Edited March 1, 2022 by The Neophyte Numismatist

[RWB]

On 2/28/2022 at 5:33 PM, Alex in PA. said:

You lose.

The top five sources of U.S. total petroleum (including crude oil) imports by share of total petroleum imports in 2019 were - Canada 49% - Mexico 7% - Saudi Arabia 6% - Russia 6% - Colombia 4%

stated on August 16, 2021 in social media posts:

The U.S. is “now importing 800,000 barrels of oil from Russia,” but that could have been prevented if the Keystone XL pipeline hadn’t been cancelled.

False. The imports were for corporate profit, not for actual need to cover a domestic shortfall.

Second the Keystone pipeline would have conveyed Canadian oil to export (non-US) markets.

[karl novak]

On 2/28/2022 at 7:34 PM, RWB said:

False. The imports were for corporate profit, not for actual need to cover a domestic shortfall.

Second the Keystone pipeline would have conveyed Canadian oil to export (non-US) markets.

That is correct.  Funny how some can't be bothered with looking up the actual facts...

[GoldFinger1969]

Of course we IMPORTED oil to "make profit."  What, we should not import ANY oil -- so that the domestic-only price can be $175/barrel ?

Oil is a GLOBALLY TRADED COMMODITY (NatGas trades locally for the most part) but oil companies do NOT just "import for profit."  If it were up to them, they would source the oil domestically to cut down on raw and transportation costs.

They can't do it.

The people you see on the news -- with the exception of CNBC, Bloomberg, Fox, and FBC -- don't know what they are talking about when it comes to oil and energy markets.  THEY ARE CLOWNS !!!  MSNBC has a sociology professor talking about how to produce more oil while sister station CNBC has someone who owns an oil company.  Who do you all think knows more about producing oil, the guy with millions at stake or some clown at an Ivy League school ?

Nobody on TV who has not read "The 7 Sisters" or "The Prize" should even be allowed to talk about energy policy.

Edited March 1, 2022 by GoldFinger1969

[GoldFinger1969]

On 2/28/2022 at 7:22 PM, The Neophyte Numismatist said:

On a serious note:  I think the gold market will continue to have some upward mobility, especially as equities continue to gyrate with uncertainly in Ukraine.  

If Joe continues to look like Jimmy, our gold is going to skyrocket. 

I think the gold market is afraid Russia will dump gold for hard currencies but nobody will trade with them so it's a moot point.

 

Edited March 1, 2022 by GoldFinger1969

[GoldFinger1969]

On 2/28/2022 at 7:15 PM, tj96 said:

How did we get from gold to oil?

Oh, never mind.  It's black gold, Texas tea!!

And Jed Clampett used those oil and black gold profits to buy coins !!!  

[The Neophyte Numismatist]

On 2/28/2022 at 9:19 PM, GoldFinger1969 said:

And Jed Clampett used those oil and black gold profits to buy coins !!!  

Jeff Bezos already moved into Jed's house (literally).  Sounds like he is taking advantage of the real estate boom, too!

[Alex in PA.]

On 2/28/2022 at 9:18 PM, GoldFinger1969 said:

I think the gold market is afraid Russia will dump gold for hard currencies but nobody will trade with them

Once again; when it comes to gold greed has no allies.  I speculate:  The EU would snap up all of Putin's gold in exchange for Euros without blinking an eye.

[tj96]

Isn't it about the golden rule?...     Whoever has the gold, makes the rules!  😉

[VKurtB]

On 2/28/2022 at 6:34 PM, RWB said:

Second the Keystone pipeline would have conveyed Canadian oil to export (non-US) markets.

Well said, and true. But all of it helps. Do everything. Do all of it. All the time. Renewables need to be in ADDITION, not instead of. 

[tj96]

On 3/1/2022 at 1:40 PM, VKurtB said:

Well said, and true. But all of it helps. Do everything. Do all of it. All the time. Renewables need to be in ADDITION, not instead of. 

If renewables can work and becomes a part of our market economy and make a profit that the American people want to buy (WITHOUT GOVERNMENT SUBSIDIES) then fine.   I don't want my tax dollars paying for it....  Hello Solyndra!!!

Edited March 1, 2022 by tj96

[VKurtB]

On 3/1/2022 at 1:05 PM, tj96 said:

If renewables can work and becomes a part of our market economy and make a profit that the American people want to buy (WITHOUT GOVERNMENT SUBSIDIES) then fine.   I don't want my tax dollars paying for it....  Hello Solyndra!!!

Well, having been here a year and being a student of weather, any renewables effort that doesn’t include a big ol’ windmill in my back yard is a bad joke. And I don’t see one. My wife’s infernal wind chimes NEVER stop. 

Edited March 1, 2022 by VKurtB

[GoldFinger1969]

On 3/1/2022 at 2:05 PM, tj96 said:

 Hello Solyndra!!!

When do they do their IPO ??  

Maybe Elizabeth Holmes can help with the underwriting.......