February 2022
THE RUSSIAN INVASION OF UKRAINE
The Russian invasion took the world by surprise. Citizens of Ukraine rushed to banks in order to withdraw cash and ensure that their financial reserves were kept close at hand. This caused long lines and major crowds in front of banks. A nearly identical situation occurred at gas stations, where people waited in line to obtain fuel.
In response to the invasion, economic sanctions were imposed, including the exclusion of certain Russian banks from the international SWIFT payment system. The war and economic sanctions also caused fear among Russian citizens. Images of long lines in front of banks in Russia quickly spread around the world. Russian citizens attempted to withdraw their cash out of concern for the ruble. Due to severe Western sanctions, the ruble fell to a historic low, recording a dramatic decline of 26% in a single day. Russia introduced measures prohibiting foreign citizens from taking cash out of the country. Meanwhile, the United Nations overwhelmingly condemned the Russian invasion and called for an immediate end to the conflict.
February 28 became a day that frightened the entire world and triggered countless financial and structural disruptions. Voices of reason were heard across the globe, calling for an immediate end to the conflict. Citizens feared the possibility of an impulsive confrontation between NATO and Russia, which could have caused unimaginable consequences. Uncertainty and unrest pushed gold to a new historic high. In just a single day, gold increased in value by six percent (6%). Gold traditionally reacts to global instability by increasing in value. Demand for gold broke all previous records. Only two days after the invasion, leading gold producers were showing zero stock availability across their inventory accounts. Owning even a single gram of gold became a true privilege. It later became clear that citizens of Poland were among the largest buyers of investment gold in Europe. The reasons do not need extensive explanation, but geographic proximity to the crisis region was certainly one of the key factors.
April 20, 2020 – Belgrade
COVID 19 was claiming a large number of human lives every day.
Many factories suspended production, while the transportation of goods slowed down significantly, leading to real shortages of certain products around the world.
One of the markets that experienced a severe shortage was the physical gold market.
Across Europe, it became almost impossible to buy a gold ducat or a gold bar.
The largest gold manufacturers located in southern Switzerland — Argor-Heraeus, Valcambi, and PAMP — suspended production in order to protect their workforce.
Mass quarantines around the world and other measures implemented by governments to prevent the spread of the virus led to severe restrictions on movement, which also limited consumer spending. As a result, economic activity declined significantly. All sectors of the economy were affected, some more severely than others. The hospitality and tourism industries recorded unprecedented losses.
The pandemic was slowly but steadily pushing the world into a new recession. For precisely these reasons, many investors wanted to buy gold at that moment. Investors feared economic instability and began withdrawing money from banks in large numbers, wanting to keep their funds close at hand. In our view, there is no need for panic, and at such moments the most important thing is to preserve health. Gold has demonstrated a high level of resilience in situations like these, which is why so many people seek to own it before the onset of a recession. It is well known that during recessions, the value of gold can increase several times over. During the global recession of 2008, the value of gold increased by 280%. After the crisis ended, the value stabilized, but the price remained approximately 200% higher than before.