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PRECIOUS-Gold holds above $1,300 as Ukraine worries stoke safe-haven demand
August 13, 2014 / 3:43 AM / 3 years ago

PRECIOUS-Gold holds above $1,300 as Ukraine worries stoke safe-haven demand

* Asian shares struggle due to Ukraine crisis
    * Physical demand for gold weak - dealer
    * Coming up: U.S. retail sales for July at 1230 GMT

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Aug 13 (Reuters) - Gold was well supported above
$1,300 an ounce on Wednesday as weak investor morale in Germany
and fears over the economic impact on Europe of the crisis in
Ukraine prompted investors to seek safety in bullion.
    The yellow metal benefited from safe-haven bids as Asian
shares struggled after Wall Street snapped a two-day rally, with
the crisis in Ukraine sapping investor confidence. 
    Spot gold rose 0.2 percent to $1,310.30 an ounce at
0627 GMT, after a flat close in the previous session. Silver
, tracking gold, gained nearly 1 percent. 
    "Gold prices will be quite stable in the near term with the
downside limited due to geopolitical tensions," said Dick Poon,
general manager of refiner and dealer Heraeus Metals in Hong
Kong.
    "What is worrying is that physical demand has been very slow
this year. We might see some slight pick-up in demand towards
the end of the year," he said.
    Gold has gained almost 9 percent this year, hurting demand
for jewellery, bars and coins in top consuming region Asia.
Record purchases last year, when prices plunged 28 percent, and
a strong dollar have also dulled gold's appeal. 
    A lack of robust physical demand could make it hard to
sustain rallies and may also mean there is little support if
prices drop.
    For now, gold is drawing support from a survey on Tuesday
showing German analyst and investor morale plunged in August to
its lowest level in more than 1-1/2 years as the crisis in
Ukraine took its toll, suggesting that Europe's largest economy
is running out of steam. 
    A Russian convoy of trucks carrying tonnes of humanitarian
aid left on Tuesday for eastern Ukraine, as Kiev and Western
governments warned Moscow against any attempt to turn the
operation into a military intervention by stealth.
 
    Tensions in the Middle East also boosted gold's appeal as an
alternative investment. The United States has sent about 130
additional military personnel to Iraq, as Washington seeks to
help Iraq contain the threat posed by hardline militants from
the Islamic State. 
    Talks to end a month-long war between Israel and Gaza
militants are "difficult", Palestinian delegates said, while
Israeli officials said no progress had been made so far and
fighting could soon resume. 
    
    PRICES AT 0627 GMT      
 Metal            Last      Change   Pct chg
                                     
 Spot gold          1310.3     1.96      0.15
 Spot silver         20.03     0.18      0.91
 Spot platinum      1468.6      6.9      0.47
 Spot palladium     875.08     2.28      0.26
 Comex gold           1312      1.4      0.11
 Comex silver       20.065     0.16       0.8
 Euro               1.3371                   
 DXY                81.479                   
                                     
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Alan Raybould)

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