Gold prices fall for second straight day, dollar higher

FOX Business Flash top headlines for March 28

Here are your FOX Business Flash top headlines for March 28.

April gold fell 0.7% to settle at $1,921.90 an ounce on Comex. Meanwhile, the dollar was stronger versus major rivals, with the ICE U.S. Dollar Index up 0.3%. 

"The dollar has generally been the primary safe haven in recent weeks, but interest in gold, while perhaps somewhat subdued, is still relatively solid," said Rhona O'Connell, head of market analysis, EMEA & Asia, at StoneX, in a note. "Investor sentiment has remained positive in the face of continued geopolitical risk," she said.

GOLD PRICES DOWN, BUT STILL SHOWING GAINS FROM LAST WEEK

Reuters reported Russia’s gold stash has some value for Moscow. Though Western sanctions have frozen a chunk of the country’s foreign exchange reserves following its invasion of Ukraine, Vladimir Putin’s regime has about $140 billion of the yellow metal that is beyond the direct reach of sanctions . Using it can require complicated and risky schemes. But that also makes it difficult to track.

TickerSecurityLastChangeChange %
GOLGOL LINHAS AÉREAS INTELIGENTES7.18+0.07+0.98%
GC1n.a.n.a.n.a.n.a.

Putin has been shoring up his defenses against economic restrictions for years. Russia’s gold holdings have tripled since it annexed Crimea in 2014, triggering U.S. sanctions. A senior White House official last week estimated bullion makes up about 20% of the country’s central bank’s overall reserves.

Gold futures fell for a second straight session as the U.S. dollar strengthened and investors eyed developments in the Russia-Ukraine war. (iStock / iStock)

To make use of the hoard, Russia would likely have to physically move gold beyond its borders. That’s why the United States and its allies last week moved to close that loophole. The Treasury Department said any transactions involving gold held by the Russian central bank are subject to existing sanctions, which means anyone who helps convert the precious metal into U.S. dollars could face penalties.

GOLD APPEAL LESSENED AS WAR IN UKRAINE DRAGS ON

Despite those risks, some supportive or opportunistic countries may be Owilling to help Putin. Venezuela, for example, may have relied on Russia after the United States stepped up sanctions on the South American country in 2017. Opposition representative Julio Borges said last year that Russian-chartered planes picked up gold from Venezuela to be refined in Mali and then resold in the United Arab Emirates for dollars and euros.

Venezuelan leader Nicolas Madura may be counted on to help Russia bypass U.S. sanctions. (Photo by Matias Delacroix/Getty Images / Getty Images)

Russia could also turn to nefarious actors. In 2020, the U.S. State Department said it was following a visit to Venezuela by the private jet of Libyan militia leader Khalifa Haftar, who was suspected of trading gold for dollars.

The usually complex schemes can take years to prosecute. U.S. courts are still examining some aspects of an alleged plot that started in 2010 and involved several Turkish entities that helped Iran evade sanctions, including turning gold into cash. The plan involved money servicers, front companies, fake humanitarian food shipments and businesses located in the United Kingdom, Switzerland and Hong Kong.

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The Russian rouble has fallen by more than 20% against the dollar this year.

– Reuters contributed to this report.

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