it wont be all about the ukraine

Yesterday I posted 'Its all about the Ukraine', well it is for now, but it wont be the case for long...

Gold has obviously done well in the last 24 hours up over 1.5% & breaking $1350. There is resistance at $1360, however I see major resistance at $1420. What is encouraging about this rally is gold hasn't really soared. I have seen it spike 5-6% on a big night on the back of international crisis & usually straight afterwards it gives it all back. The buying appears relatively cautious & that has to be a good thing in the long run. The Ukraine will get worse before it gets better, however as long as it doesn't erupt into a full scale war between the Russians & the West, the story will get old & have less impact on the gold price, as a story. However there are other implications such as inflated gas prices in Europe, the Brent oil price along with it which will inflict economic strain on Europe in particular. Then there is the economic woes of the Ukraine itself, as it is basically bankrupt & at some point there will need to be a bailout. With the Ukraine grabbing all the headlines, what the mass media are tending to forget is the Ukraine is just the first of many countries in a similar financial state & I'm sure it wont be on its own in regards regime change & civil unrest if not civil war. I believe this will be the tone for 2014 & perhaps 2015 & there will be large financial losses to come imo, particularly from European banks that have the largest exposure to the Emerging Markets. Hardly a time for equities to continue their push higher & we may have seen the start of the push lower in equities in the last 24 hours. One would have to expect gold to attempt $1420 in the coming month & that will be its real test. India by then may have completed their review on import duties & this may well be the catalyst to push gold through that big technical level. Happy trading! Cheers Daytr