Gold and silver opened up this final day of the week in impressive fashion and are on pace to make this one of the best 5-day sessions both metals have experienced thus far in 2014. Safe-haven demand for physical gold and silver has been on the rise all week long and with the situation in Ukraine on the verge of complete deterioration, it seems as though this type of demand will stick around for a little while.

As it stands, gold has gained more than $40 for the week while silver is just shy of picking up a whole dollar. With price action this dramatically upward-facing, the only way gold and silver could be delivered a blow is through profit-taking over the weekend.

Crimea Referendum Sparks Tensions

Last week, a major development in the crisis in Ukraine happened in the form of Crimea’s regional parliament voting unanimously to rejoin the Russian Federation. Though the vote was struck down and hailed as illegitimate in the eyes of Ukraine’s interim government and many leaders from Western nations, it was announced shortly thereafter that the citizens of Crimea would be able to participate in a similar vote in only a few days. This vote, commonly referred to as a referendum, is scheduled to take place on Sunday and most of the world is expecting to see Crimeans vote in much the same way that their parliament did. The pro-Russia sentiments run deep in Crimea and with their citizens having to face an uncertain future in Ukraine, many of them would rather flee to the relative stability of their Russian neighbors.

If the vote does go as expected on Sunday, there is no saying what kind of action Ukraine and its allies will take against Crimea, Russia, or both. What we do know, however, is that military action is seeming a more and more likely outcome of this Sunday’s vote. For this reason, many investors around the world are ridding themselves of riskier assets and instead fleeing to safe-haven assets, namely gold and silver. This week’s spike in safe-haven demand was seen in rising spot prices from Tuesday onward with little to no slip-ups in between. We will continue to monitor the situation in Ukraine as it will undoubtedly have some sort of impact on spot gold and silver further along down the road.

FOMC Meeting On The Horizon

In other news, the Federal Open Market Committee meeting is scheduled to kick off next week and as is usually the case the speculation with regard to the meeting’s outcome is already spreading like wildfire. Most market experts agree that tapering will be further intensified, though these same experts disagree on the margin by which the Fed will reduce monthly bond-buying this time around.

There is a strong contingent that believes the Fed will stay on course with another $10 billion reduction, though some other people are under the impression that the FOMC will taper by either more or less than the aforementioned $10 billion amount. Precious metals investors seem to already be factoring in a $10 billion reduction into their day to day dealings and should this be the case, the FOMC meeting will likely have none too large of an impact on spot gold and silver. If, however, the Fed decides to taper by more than the accustomed $10 billion, this could spell disaster for both gold and silver.