Daily Market Update

Ukraine Currency Collapses Nearly 70% Against Gold In 4 Months

Today’s AM fix was USD 1,299.25 EUR 937.48 & GBP 771.89 per ounce.
Yesterday’s AM fix was USD 1,299.00, EUR 938.58 & GBP 773.03 per ounce.

Gold rose $0.20 or 0.015% yesterday, closing at $1,303.10/oz. Silver gained $0.05 or 0.25% yesterday to $19.67/oz.

Gold in U.S. Dollars – Year To Date, 2014 – (Thomson Reuters)

Gold traded near $1,300 an ounce, set for a weekly drop, as investors weighed tentative signals of a U.S. recovery against the risk of conflict in Ukraine and geopolitical tension. Silver, platinum and palladium are all marginally lower.

Prices reversed losses after Ukraine accused Russia of fueling terrorism in its eastern provinces. The metal is 1.3% lower this week and may snap a two-week advance. However, shorts will be nervous heading into a long holiday weekend with the potential for headline risk.

Gold bullion should be higher as the dollar is under pressure after Federal Reserve chief Janet Yellen yesterday reiterated that ultra-accommodative monetary policies will continue. This will manifest in interest rates staying near zero percent and continuing currency debasement.

Gold consolidated yesterday around the 200-day simple moving average and found some support around $1,297/oz, the 61.8% retracement of gold’s rise in April.

Assets in the largest gold-backed exchange-traded product sank the most this year. New York’s SPDR Gold Shares, reported outflows of 8.39 tonnes on Wednesday, the largest one day decline in its holdings since December 23. That has erased almost its entire inflow for the year, with its holdings currently at 798.4 tonnes, against 798.22 on December 31.

Gold in euros continues to consolidate around the €1,000/oz mark and looks set to rise in the coming months. The euro’s strength is not merited given the appalling fundamentals of Italy, Spain, Portugal and Greece. As soon as the Eurozone debt crisis rears its ugly head again, and it will, gold will again protect against euro weakness.

Gold in Euros – Jan, 2009 to April 17, 2014 – (Thomson Reuters)

The euro, the dollar and the pound have been three of the stronger currencies in the world in recent months which has curtailed gains in precious metals in these currencies. This has not been the case for emerging market currencies many of which have fallen sharply and gold has risen correspondingly in value.

Thus, gold has again acted as a safe haven for millions of investors and savers around the world and protected them from the declining value of fiat currencies.


This is particularly evident in Ukraine where the economy is nearing collapse and the currency is in free fall. The Hryvnia has been the world’s worst performing currency in 2014.

The charts below gives an indication as to the terrifying magnitude and speed of the recent decline in the value of the currency. This week alone the currency has fallen by 7% against gold or gold per ounce has risen from 15,669 hryvnia per ounce at open on Monday to 16,880 hryvnia per ounce today.

Gold in Ukrainian Hryvnia (Sharelynx.com)

Year to date, gold in hryvnia has surged by 69% from 9,992 per ounce to 16,880 per ounce or to put it more correctly, Ukraine’s national currency has collapsed by 69% against gold in less than four months.

This has resulted in the cost of food, fuel and basic staples surging for ordinary people in Ukraine.

People are buying gold, silver, other hard tangible and income generating assets.


Once again, the lucky few who own physical gold are being protected from the currency collapse. They are in a position to buy food, water, property, land, businesses and other income generating and life sustaining essentials.

Thereby, once again showing the lack of knowledge and sometimes simple bias of those who claim that gold is not a safe haven and discourage investors from owning even a small allocation to gold.

Gold is protecting people and companies in Ukraine today and will do the same for people and families in other countries in the coming months and years.

Singapore is now one of the safest places in the world to store gold – Essential Guide To Storing Gold In Singapore

Mark O'Byrne
Executive Director


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