Gold futures shot higher on Monday after the U.S. and its allies added new sanctions against Russia over the weekend as a result of its invasion last week of Ukraine.
Those sanctions include prohibiting any transactions with the Central Bank of the Russian Federation, as well as Russia’s national wealth fund and the Russian Ministry of Finance.
Some market strategist said that gold values should be more elevated and speculated that Russia may be liquidating some gold reserves to garner cash against the barrage of financial sanctions it is facing.
“It could be that the Russian central bank is dumping gold on the open market to shore up its devastated currency, since most of its FX reserves have been frozen,” wrote Marios Hadjikyriacos, senior investment analyst at XM, in a daily note.
marked an all-time low, the ruble, but that decline had moderated somewhat, down 13% to 94.88, according to FactSet, after shedding 25% at its low, though trading has been described as thin and volatile. That decline came after Russia’s central bank raised a key lending rate 20%.