On May 20 local time, US Secretary of State Antony Blinken made a strong statement in his speech at the Washington Think Tank that if Russia and Ukraine failed to make substantive progress on the ceasefire agreement in the next two weeks, the United States would join the EU to implement a new round of sanctions against Russia, focusing on energy, finance and military industrial complex. This statement immediately caused a market shock. On May 21st, during the Asian session, spot gold prices surged last night, breaking through the $3300/ounce mark and reaching a new high of $3320.76 in over a week.

On May 19 local time, President Trump of the United States and President Putin of Russia held a two-hour telephone conversation and held intensive consultations on the ceasefire in the Russia-Ukraine conflict. After the call, Trump stated that Russia and Ukraine will “immediately initiate negotiations aimed at ending the war” and revealed that the Vatican has agreed to host the talks. Putin subsequently confirmed through a Kremlin statement that Russia was ready to draft a memorandum of understanding with Ukraine on a peace agreement and had restored direct contact with Istanbul negotiators. This breakthrough led to a 0.3% drop in spot gold prices in Asia from a high of $3245 per ounce to around $3220 per ounce in early trading on May 20th. The market’s pricing of geopolitical risk premium plummeted from $32 per ounce to $18 per ounce.