As reports emanating from Estonian officials warning of an impending Russian military invasion of Eastern Ukraine from persist, and the Russian government is making statements that Ukraine has “lost control” of the eastern part of the country and that it “reserves the right to intervene,” investors watch as gold is near a six month high and concerns in China won’t go away.
As 2 PM EST, the stock market was down slightly but traders are watching the close – and more importantly the weekend action – and gearing up for what could be a highly volatile start to the week Monday.
Who wants to hold stocks over the weekend?
The key questions traders are asking is: who wants to take home significant long positions in the stock market this weekend?
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In mid afternoon trading gold was up slightly, after rising nearly 2% on the week as a result of global fears. Money is flowing into gold-backed ETFs, and China and India, among other nations, appear to be significantly purchasing the physical metal, a report on CNBC noted that “physical demand has quieted as higher prices put off buyers – making some cautious about how long the rally can last.” The report said demand in China, the world’s biggest bullion consumer, has fallen off with prices in Shanghai at a discount to spot prices. Spot gold is at its highest level since Sept. 9, $1,387 per ounce, with gold futures exhibiting backwardation at $1,379 per ounce. Holdings in SPDR Gold Trust (ETF) (NYSEARCA:GLD), the world’s largest gold-backed exchange-traded fund, has risen to 2.10 tons to 813.30 tons on Thursday, according to the report.
Cold war concerns
Traders note that gold has been getting a big on global uncertainty, the most recent of which emanated from Russia. If Russia invades Ukraine it would be the most aggressive action taken by the former communist flag bearer since the cold war “ended” and could usher in a new tension.