Gold Rallies as Ukraine-Russia Tensions Spur Demand
San Francisco (Apr 23) Gold rebounded from a 10-week low in New York as tensions between Ukraine and Russia escalated, spurring demand for haven assets.
President Vladimir Putin warned Ukraine against continuing its anti-separatist offensive after government troops killed five rebels and prompted Russia’s military to begin new drills. The metal reached a six-month high in March after Russia annexed Ukraine’s Crimean region. The news today prompted traders to unwind bets on a drop, said Steven Scacalossi, the head of global metals sales at TD Securities in Toronto.
“It was several Russia/Ukraine headlines that lit the short-covering fuse,” Scacalossi said in an e-mailed report. “Risk appetite is being hit with expectation that the West will introduce more aggressive sanctions against Russian interests.”
Gold futures for June delivery rose 0.4 percent to $1,289.90 an ounce at 11:59 a.m. on the Comex in New York. Prices earlier dropped to $1,268.40, the lowest since Feb. 10. Trading was 48 percent above the average for the past 100 days, data compiled by Bloomberg showed.
The U.S. threatened more sanctions against Russian interests including the banking, mining and energy industries, if it fails to ease the tension.
Gold slid 28 percent in 2013, the biggest annual loss since 1981 on speculation the Federal Reserve would reduce stimulus as the U.S., world’s largest economy recovers.
Silver futures for July delivery rose 1.2 percent to $19.695 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for July delivery gained 0.5 percent to $1,411.50 an ounce.
Palladium futures for June delivery climbed 2 percent to $801.70 an ounce on the Nymex. The price advanced to $817 on April 14, the highest since August 2011, on speculation supplies may be restricted from Russia, the biggest producer. Holdings in palladium-backed exchange-traded products rose 1.6 metric tons to a record 78.7 tons yesterday, data compiled by Bloomberg show.
