-- Published: Wednesday, 11 February 2015 | Print | Disqus
- Merkel and Hollande to attend peace talks in Belarus to resolve Ukraine’s civil war today
- US and UK not invited
- Germany and US present united front but tensions ripple under the surface
- Foreign Minister of Greece, Nikolaos Kotzias, to meet his Russian counterpart Sergei Lavrov today as the crucial Eurogroup of finance ministers meet to determine the fate of Greece and the Euro
- Russia negotiates free-trade agreement with Egypt. Cyprus permits Russia to use ports and airstrips for humanitarian and emergency purposes
The leaders of Russia, Germany, France and Ukraine will meet in the Belarusian capital of Minsk today in a bid to resolve Ukraine’s brutal civil war.
The meeting, which the Russia Today news agency describe as a Franco-German peace initiative, will not include the leaders of the US or Britain.
RT suggests that the talks were triggered by John Kerry’s visit to Kiev where he announced the possibility of the US arming Ukraine government troops adding that “Europe is reluctant to have a full-blown war on its doorstep.”
Preliminary talks between Merkel, Hollande and Putin in Moscow on Friday were held behind closed doors. On Monday Merkel met with Obama in Washington. While they tried to present a united front the subtext of their statements and their body language gave a different impression.
Merkel and Obama in Washington
US politicians have been clamouring for Obama to provide weapons to the Ukrainian government. But Merkel was unequivocal in her response to such proposals. “I don’t see a military solution” she said adding that sending arms to the Ukraine government would be “not just highly risky but counterproductive.”
Obama insisted that the arms option was under “ongoing analysis” while at the same time agreeing with Merkel that, for now, the civil war would not be resolved by military means. He insisted that Russia’s isolation would worsen if it failed to change course.
Meanwhile, geo-politics will play as great a role in today’s Eurogroup meeting of finance ministers as economic considerations.
The Greek government have sent a clear message to the EU when the Greek Kathimerini news agency reported on Monday,
“Greece’s Foreign Minister Nikolaos Kotzias is to visit Moscow on Wednesday to hold talks with his Russian counterpart Sergei Lavrov, Russia’s Interfax and TASS news agencies reported on Monday citing a source in the Russian Foreign Ministry.”
Reuters reported Greek defence minister, Panos Kammenos as saying,
“What we want is a deal. But if there is no deal – hopefully (there will be) – and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B.”
“Plan B is to get funding from another source. It could the United States at best, it could be Russia, it could be China or other countries.”
That Mr. Kotzias will be in Moscow today is telling.
At the same time, Cyprus have announced an agreement with Russia that will allow Russia’s military to use it’s ports and airstrips for humanitarian and emergency purposes.
“We want to avoid further deterioration in relations between Russia and Europe,” said President Anastasiades. “Cyprus and Russia enjoy traditionally good relations and that is not going to change,” he added.
It was reported yesterday that Egypt will join the Eurasian Economic Union, a free trade group modelled on the EU which is led by Russia. Clearly Russia is not as isolated as Western powers would wish.
With the leaders of two key NATO states initiating diplomacy with Russia independently of the US and the UK and another minor NATO player, Greece, pivoting East-ward to Russia to strengthen its independence from the EU it is clear that the NATO “alliance” is not what it once was.
If diplomacy should fail in Minsk today it would pave the way for the US to start arming the Ukraine government. This would lead to an acceleration of the war and it’s morphing into a proxy war to which Germany and France are opposed.
Coupled with the latent economic crisis in Europe – which will be exacerbated no matter what the outcome of today’s Eurogroup meeting – an acceleration in Ukraine’s civil war would be disastrous for the people of Europe.
The EU may fracture and with it the Euro currency. We continue to urge our clients to hold physical gold, the only currency without counterparty risk, in safe locations around the world.
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MARKET UPDATE
Today’s AM fix was USD 1,235.50, EUR 1,092.40 and GBP 807.73 per ounce.
Yesterday’s AM fix was USD 1,237.50, EUR 1,096.78 and GBP 812.97 per ounce.
Gold fell 0.54 percent or $6.70 and closed at $1,234.00 yesterday, while silver slipped 0.71 percent or $0.12 closing at $16.91.
Gold inched up on Wednesday in Asia as the dollar’s gains retreated and the market awaits a possible Greek exit from the eurozone. The county’s 240-billion-euro bailout expires on February 28th, most likely leaving the country bankrupt and at risk of a eurozone exit unless it can strike a deal with creditors. Today, Greek Finance Minister Yanis Varoufakis is meeting with European counterparts asking for a 10 billion-euro ($11.3 billion) bridge plan to stave off a funding crunch and allow Greece more time to renegotiate austerity terms with creditors.
Uncertainty over when the U.S. Fed will announce an interest rate hike is also limiting gold’s gains, however a Fed official mentioned June yesterday in the press.
A hike in interest rates by the Fed, which has maintained near zero rates since 2008 to boost the sluggish U.S. economy, could further strengthen the U.S. dollar and may dampen the demand for bullion, a non-interest-bearing asset.
The uncertainty over whether Vladimir Putin and Ukrainian President Petro Poroshenko can negotiate a lasting ceasefire in Minsk is another factor weighing on the bullion market.
Spot gold rose 0.3 percent to $1,237.70 an ounce in late trading in Singapore.
Gold in London was trading range bound $1,233.63 per ounce up 0.07 percent. Silver was last $16.95 up 0.30 percent and palladium $1,207.40 up 021%.
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-- Published: Wednesday, 11 February 2015 | E-Mail | Print | Source: GoldSeek.com
