Gold steady on Ukraine tensions, poised for second weekly drop

SINGAPORE Fri May 9, 2014 12:42pm IST

24 karat Buffalo gold reserve proof coins are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. DREUTERS/Shannon Stapleton/Files

24 karat Buffalo gold reserve proof coins are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. D

Credit: Reuters/Shannon Stapleton/Files

Related Topics

SINGAPORE (Reuters) - Gold prices were steady on Friday, supported by geopolitical tensions in Ukraine, with investors eyeing fund flows and Asian physical demand for further cues.

But the metal was on track to post its second straight weekly decline as more strong U.S. data showed that the world's largest economy was recovering well, supportive of the Federal Reserve's stance to keep trimming monetary stimulus.

"People are not very enthusiastic to enter the market at the moment," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

"Right now, the Ukraine situation is supportive of prices but data coming from the U.S. continues to be strong and that could keep investors away and weigh on prices."

Spot gold was little changed at $1,290.25 an ounce by 0641 GMT. The metal is down 0.7 percent for the week, its second straight weekly decline.

Data on Thursday showed that the number of Americans filing new claims for unemployment benefits fell more than expected last week, indicating the labour market was strengthening despite a run-up in applications in prior weeks.

Gold is often seen as a safe-haven investment during times of economic and geopolitical uncertainty.

Ukraine tensions have been behind much of gold's 7 percent rise this year, but traders fear the gains would dissipate quickly once the situation is resolved.

Pro-Moscow separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum on self-rule, declaring they would go ahead on Sunday with a vote that could lead to war.

The decision, which contradicted the conciliatory tone set by Putin just a day earlier, caused consternation in the West, which fears the referendum will tear Ukraine apart.

Traders said they were eyeing flows in SPDR Gold Trust, the top gold-backed exchange-traded fund. Holdings of the fund have been unchanged so far this week after a near 10-tonne decline last week.

Physical demand has also been muted despite the drop in prices, with many hoping that a stabilization in prices would bring back buyers.

(Editing by Edwina Gibbs, Muralikumar Anantharaman and Subhranshu Sahu)

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

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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