Russian Unrest: Minor Impact on Markets, Gold and Oil Prices Show Resilience
The recent unrest in Russia has had a minor impact on oil prices and gold, with the financial markets not experiencing significant fluctuations as a result.
During times of geopolitical uncertainty, safe-haven assets like gold and the U.S. dollar tend to rise, while riskier assets tend to decline. Although there have been some movements in this direction, they have been limited. In a video released on Monday, Russia’s Defense Minister Sergei Shoigu visited troops, indicating that he remains in his position as the regime strives to restore stability.
The instability in Russia, coupled with President Vladimir Putin’s weakened hold on power, has the potential to jeopardize oil production in one of the world’s largest oil-producing countries.
Traders may be awaiting the extent of the repercussions stemming from the rebellion, which was led by Yevgeny Prigozhin, the leader of the private military company known as the Wagner Group.
The uprising was called off following negotiations facilitated by Belarus.
Chris Turner, a strategist at ING, commented that the restrained market response likely arises from a lack of clarity regarding the aftermath of this challenge to President Putin’s authority. He also noted that the markets have already experienced a stronger dollar and higher energy prices due to the Russian invasion of Ukraine throughout the past year.
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The international benchmark Brent crude increased by 0.7% to reach $74.40 per barrel, while West Texas Intermediate rose by 0.6%.
Separately, the Organization of the Petroleum Exporting Countries (OPEC) predicted on Monday that global oil demand will continue to rise over the next two decades. It stated that overall energy demand is expected to increase by 23% by 2045.
Gold prices saw a 0.3% gain, reaching $1935.50 per ounce. The Nikkei index in Japan closed 0.3% lower, while Hong Kong stocks experienced a decline of approximately 0.5%.
U.S. Secretary of State Antony Blinken remarked that the rebellion revealed significant weaknesses in Putin’s authority.
Source: Barron’s
Alexander Stefanov
Reporter at CoinsPress
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