Gold at 1-1/2 week high as Ukraine tensions drive safe-haven bids

SINGAPORE Mon Apr 28, 2014 9:28am IST

Liquid gold is poured into a mould in preparation to produce gold leaf at Erich Dungl's gold leaf workshop in Schwechat March 4, 2014. REUTERS/Heinz-Peter Bader/Files

Liquid gold is poured into a mould in preparation to produce gold leaf at Erich Dungl's gold leaf workshop in Schwechat March 4, 2014.

Credit: Reuters/Heinz-Peter Bader/Files

Related Topics

SINGAPORE (Reuters) - Gold climbed to its highest in 1-1/2 weeks on Monday, steadying above $1,300 an ounce as weaker equities and escalating geopolitical tensions in Ukraine boosted the metal's safe-haven appeal.

Traders were cautious about the price gains as they said the tensions could be short-lived and that outflows from gold-backed exchange traded funds had only paused, rather than reversing.

They were also waiting for U.S. nonfarm payrolls report and the Federal Reserve's policy meeting later in the week for stronger trading cues.

"While the price break over $1,300 may be construed as positive for the bullion market, gains that have historically been boosted by bouts of rising geopolitical tensions tends to be fleeting and can be erased just as fast as they materialize," HSBC analysts said in a note.

Spot gold had risen 0.07 percent to $1,303.80 an ounce by 0327 GMT, after earlier hitting $1,306.11 - its highest since April 16.

Pro-Russian rebels paraded European monitors they are holding in eastern Ukraine, freeing one but saying they had no plans to release another seven as the United States and Europe prepared new sanctions against Moscow.

The rising tensions sent risk-averse investors scurrying out of global equities, and into safe-havens such as gold.

Investor sentiment towards gold has improved in recent days. Hedge funds and money managers raised their bullish bets in gold and silver futures and options, their first increase in five weeks, according to data from the Commodity Futures Trading Commission on Friday.

SPDR Gold Trust, the world's biggest bullion ETF, has not seen any outflows since April 22 though it hasn't seen any inflows either.

Markets are eyeing the Fed's policy statement on Wednesday and a U.S. jobs report on Friday to gauge the strength of the economy and the outlook for the U.S. central bank's stimulus measures.

In the physical market, premiums in India - the world's second biggest gold consumer - jumped to their highest level in more than 2-1/2 months due to short supplies.

Platinum and palladium gained as violence erupted in South Africa's strike-hit platinum belt on Sunday.

However, the end game to the 13-week strike seemed to be drawing near after the producers said they would take their latest wage offer directly to employees.

(Reporting by A. Ananthalakshmi; Editing by Ed Davies and Joseph Radford)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage