Gold price drops below $1,900 as Biden announces new Russia sanctions, traders reassess Ukraine crisis

NEW YORK (Feb 24)  The gold markets dropped below the key $1,900 an ounce level after surging 3% on the day as U.S. President Joe Biden announced new sanctions against Russia and investors reassessed the situation in Ukraine. 

Biden introduced new sanctions against Russia on Thursday afternoon following Russia's full-scale invasion of Ukraine. New sanctions targeted more of Russia's banks, the country's ability to do business in other currencies, including the dollars, euros, pounds and yen, and state-owned enterprises.

"This is a premeditated attack," Biden told reporters, "Putin is the aggressor. Putin chose this war. And now he and his country will bear the consequences."

Biden noted that sanctions are meant to have a long-term impact on Russia while minimizing the effects felt by the U.S. and its allies.

Markets were relieved to hear that new sanctions were not meant to hurt the energy market. “Our sanctions package is specifically designed to allow energy payments to continue,” Biden said.

The president also said that U.S. oil and gas companies should not exploit the Russia-Ukraine conflict to hike prices, adding that he will be releasing additional barrels of oil as conditions warrant.

In reaction to the news, gold gave up all of its overnight and daily gains and traded below the $1,900 an ounce level. April Comex gold futures were last at $1,891.60, down 0.98% on the day. Earlier in the session, gold hit a daily high of above $1,970 an ounce. 

On the other hand, the U.S. stock market pared gains and was trading in positive territory after Biden’s announcement. The S&P 500 was up 0.23% after falling into correction territory, and the Nasdaq rose 1.8%. The Dow was still down 0.84% on the day. 

By 4:00pm EST spot gold was down $40 on the day to $1898, while spot silver slid -3.3% to $24.15. Moreover, spot platinum plummeted -$44 to $1060.

KITCO