Gold Rises a Third Day as Ukraine Keeps Selling on Hold

London (Apr 25)   Gold rose for a third day as speculation of more unrest in Russia and Ukraine kept traders wary about selling metal by going short.

Gold rebounded as much as $30 an ounce yesterday as Russia’s President Vladimir Putin warned Ukraine against continuing its anti-separatist offensive. The U.S. said it may impose more sanctions against Russia. Some investors buy gold as a haven against declines in other investments.

“I doubt anyone will want to be short after yesterday’s move and given the fact that anything can happen in Ukraine over the weekend,” David Govett, head of precious metals at Marex Spectron Group in London, said in a report today. “I still believe that the overall trend will be lower in the long run.”

Gold for immediate delivery rose 0.2 percent to $1,295.55 an ounce at 10:50 a.m. in London, according to Bloomberg generic pricing. Bullion rose 0.7 percent yesterday after dropping to $1,268.64, the lowest level since Feb. 10.

Gold climbed 7.8 percent this year partly as the conflict between Russia and Ukraine fueled demand. In China, volumes for the benchmark spot gold contract in Shanghai rose to a two-month high yesterday.

“Chinese buyers appear to be coming back to the market after the price fall,” said Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou, China-based company that bought Natixis Commodity Markets Ltd.

SPDR Holdings

Gold for June delivery rose 0.4 percent to $1,295.70 an ounce on the Comex in New York. Holdings in the SPDR Gold Trust, the largest gold-backed exchange-traded product, were unchanged for a third day yesterday at 792.14 metric tons.