Is President Putin just buying time over Ukraine to protect Russia against strong sanctions should he send in the military? What does the current ebb and flow in rhetoric and action mean for gold?
LONDON (MINEWEB) – Russia’s President Putin appears to have pulled back from the brink over intervention in Eastern Ukraine – but has he really? Could he just be biding his time and taking advance measures to best protect Russia from an inevitable increase in Western sanctions – which might even have some bite next time – before making a military move. Whether Russia has troops on the Ukraine border or not is, in reality, pretty irrelevant.
If they are moved away they can just as easily be moved back again, and then across the border to ‘protect’ what Putin sees as Russia’s strategic interests. But some de-escalation just buys time in helping Russia set up bilateral trade agreements, which exclude the dollar, for key imports and exports should Russia suffer the ultimate financial sanction of exclusion from the SWIFT payments system.
This may be unlikely, but has to be in the Russian President’s thinking as a worst case scenario given the other ‘worst case’ of a military conflict between NATO and Russia has effectively been ruled out by the West. It would be too costly and would have the potential for turning into a global conflict with all the potential gains Russian.
Even the Western hawks will have learnt from history that ‘invading’ Russia is a recipe for disaster so any conflict would likely only occur on European soil, which is pretty obvious to the European element in NATO.
The latest supposedly ‘softer’ statement by President Putin has knocked the gold price, and other precious metals too – or has at least been a contributor to yesterday’s falls. The markets want to believe that the Ukraine crisis is de-escalating but all the indicators are there that another ‘Georgia situation’ is as likely as not with Russian troops eventually moving in, at the request of ethnic Russians in the eastern Ukraine to protect them from the Ukrainian army.
With military action around some key eastern Ukrainian cities continuing, and perhaps increasing as gains appear to be made by a perhaps more confident, but still hesitant, Ukrainian army the potential for overt Russian on-the-ground intervention remains strong.
For the rest of this article, click here: http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=240389&sn=Detail