Gold orbits $1,300 before Fed; Ukraine caps losses

New York (Apr 29)  Gold prices hovered around $1,300 an ounce on Tuesday as strong U.S. data offset safe-haven bids from escalating tensions between Russia and the West.

Investors are now eyeing this week's U.S. jobs report and a Federal Reserve policy meeting to gauge further the strength of the world's largest economy and the central bank's stance on tightening monetary policy.

Spot gold was last flat at $1,295 an ounce. Prices reached a 1-1/2 week high of $1,306.11 on Monday before ending down 0.6 percent on signs of a strengthening U.S. housing market. U.S. gold futures, meanwhile, dropped 0.3 percent to $1,296 an ounce.

A strong economy could mean safe-haven demand for gold would slow, and the Fed could quicken its path towards a tighter monetary policy. The U.S. central bank has already been slowing the pace of its bond purchases.

In the latest sign that the economy is recovering well, data on Monday showed contracts to buy previously owned U.S. homes rose in March for the first time in nine months.

Meanwhile, tensions between the West and Russia over Ukraine remained high after the United States imposed new sanctions on allies of Russian President Vladimir Putin, prompting Moscow to denounce "Cold War" tactics amid more violence in eastern Ukraine.

The Ukraine situation has taken a backseat this week for gold as the focus is on the Fed meeting and other data releases, said one precious metals trader.