This week, the war in Ukraine intensified significantly as U.S. President Joe Biden authorized Ukrainian forces to use long-range U.S.-made weapons for the first time to strike targets within Russia. The decision came in response to Russia's own heightened attacks on targets within Ukraine in recent days. Russia’s Defense Ministry reported that Ukraine launched six U.S.-made ATACMS missiles early Tuesday at a military facility in the Bryansk region, near the Ukraine border. According to the ministry, Russian air defenses intercepted five of the missiles, with one sustaining damage. 

In a retaliatory move, President Vladimir Putin formally lowered the threshold for Russia’s use of nuclear weapons. Under the revised doctrine, Moscow could potentially respond with nuclear force to a conventional attack on Russia by any nation supported by a nuclear power. 

This escalation rattled global markets. U.S. stock indexes retreated, while the gold price rallied and appears to have found a temporary floor, driven by a surge in geopolitical tensions. Gold continues to act as a traditional safe-haven investment, often rising in times of market volatility. The Volatility Index (VIX) climbed 9% this morning at the time of writing. 

Although war-related headlines typically have a short-lived impact on markets, the latest developments have tempered the recent outflow of investors shifting from gold and silver to other asset classes, a trend that began after the election of Donald Trump on November 5th. 

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