Ukrainian Currency Collapses - Down 28% In 4 Days Against Gold

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Today’s AM fix was USD 1,331.00, EUR 974.81 and GBP 799.88 per ounce.
Yesterday’s AM fix was USD 1,340.00, EUR 975.33 and GBP 803.12 per ounce.    

Gold dropped $11.60 or 0.87% yesterday to $1,329.00/oz. Silver fell $0.62 or 2.83% at $21.24/oz.

Get a clear picture of what a bail-in actually is with Goldcore’s 11 page bail-in guide, ‘Protecting Your Savings In The Coming Bail-In Era’


Ukrainian Hryvnia in Gold, 5 Year - (Bloomberg)

Gold is marginally higher in dollars and most major currencies today. However, yesterday’s sell off means that gold is vulnerable technically to further falls and initial support is at $1,322/oz and $1,307/oz.

The political and economic crisis in Ukraine has led to a currency crisis. The Ukrainian hryvnia has fallen by 50.14% against gold in 2014 and by 28% in the last four days alone. Ukrainians who own gold have protected their savings - again showing gold’s safe haven properties.

Yesterday, gold hit a four-month high at $1,345.35 before falling almost 1%, possibly due to profit taking and technical selling.

Gold has risen more than 10% so far this year on uncertainty over the pace of the U.S. economic recovery, worries about growth in China and continuing robust global physical demand. Geopolitical tension between Russia and the western powers over Ukraine will likely support gold.

In the physical market, premiums for gold bars in Singapore slipped to 80 cents to the spot London prices from a high of $1.50 last week after a recent increase in prices spurred sales of scraps.

Premiums in Hong Kong were unchanged at $1.30 to $1.70. In Tokyo, gold bars were offered at discounts of 25 cents to the spot London prices from zero last week after rallies in yen denominated gold contracts on Tokyo Commodity Exchange.
  
In other markets, Asian shares struggled to find a solid footing on Thursday as escalating tensions over the Ukraine led to weakness into equity markets and the risk of a renewed bout of risk off.

Ukraine is seeing bank runs, as central bank reserves shrink and some 7% of bank deposits were withdrawn in just 3 days.  Bank run fears mean some financial institutions operating in Ukraine closed branches and imposed limits on cash withdrawals this week.

Italy's Unicredit closed eight branches temporarily, while other branches reduced opening hours and imposed withdrawal limits of 1,500 hryvnias per day for Unicredit customers and 500 a day for customers of other banks.

Bail-ins are likely to be the next step taken by the authorities in Ukraine. Preparations have been or are being put in place by the international monetary and financial authorities for bail-ins. The majority of the public are unaware of these developments, the risks and the ramifications.

Get a clear picture of what a bail-in actually is with Goldcore’s 11 page bail-in guide, ‘Protecting Your Savings In The Coming Bail-In Era’