Russian invasion creates extreme volatility across asset classes including gold

LONDON (Feb 25)  Not since World War II has the world witnessed such an egregious act by a sovereign nation against a European sovereign nation. Last night Russia launched a full-scale invasion against the independent country of Ukraine. Russia's ongoing military invasion intends to demilitarize Ukraine and then topple its political structure.

Vladimir Putin instructed his military to launch a "special military operation." In an address, Putin said he had ordered this premeditated attack to protect pro-Russian sympathizers against "genocide" and "denazification" of the political leaders in Ukraine. Furthermore, he issued a stern warning on any government that would aid Ukraine, saying, "Whoever tries to hinder us... should know that Russia's response will be immediate. And it will lead you to such consequences that you have never encountered in your history."

The geopolitical crisis sent ripples through the financial markets resulting in one extremely volatile dispute in some time.

Equity markets worldwide experienced significant declines. In the United States, U.S. stocks sold off strongly when today's trading session opened and recovered during the latter part of the trading day. The S&P 500 traded to a low of 4114.65 before recovering and closing higher on the day. The S&P 500 index is currently at 4288.70, gaining 63.20 or 1.50%.

Crude oil futures rallied to just over $100 per barrel ($100.54) and then gave up most of those gains closing at $93.08 per barrel.

Gold traders also witnessed a volatile roller coaster with a tremendous price swing of almost $100 over the last 18 hours of trading. Gold futures basis most active April contract traded to a high of $1976.50 during the initial hours immediately following the invasion and then traded to a low of $1878.60 before recovering. As of 4:45 PM, gold futures are currently fixed at $1905.40, a net decline of five dollars on the day. This tremendous price swing can be easily identified in a daily chart of gold.

KITCO