Gold Lower as Market Place Takes in Stride Crimea Vote to Secede

New York (Mar 17)   Gold prices are slightly lower in early trading Monday, on some profit-taking pressure and chart consolidation from recent gains that saw prices hit another six-month high overnight. The markets are digesting well, so far, the news that Crimean citizens on Sunday voted to secede from Ukraine. April gold was last down $3.70 at $1,375.20 an ounce. Spot gold was last quoted down $5.10 at $1,377.50. May Comex silver last traded down $0.213 at $21.21 an ounce.

A referendum Sunday saw Crimean voters overwhelmingly choose to secede from Ukraine and be annexed by Russia. The vote results were not surprising. The Russian parliament said it would move quickly to annex the Crimean region. There was no major violence during or following the referendum—just jawboning from the West on the matter. Judging from the market place’s somewhat surprising “ho-hum” reaction to the Crimean vote and the situation overall on Monday morning, it appears the matter is fading to a back-burner issue. Any escalation of tensions in Ukraine would quickly put risk-aversion back into the market place, however. Look for this week to see the U.S. and European Union slap Russia’s hands with diplomatic and economic sanctions.

In other overnight news, the European Union’s inflation rate in February was up 0.3% in February from January, and up 0.7% year-on-year. The figures were below market expectations and raise the specter of further monetary policy stimulus from the European Central Bank, as the rate of EU inflation is well below the ECB’s target of 2.0% per year.

Focus of the market place is turning to this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC), taking place Tuesday and Wednesday. Fed Chair Janet Yellen will deliver her first press conference after the FOMC meeting’s conclusion Wednesday afternoon. It is expected the FOMC will continue on its “tapering” program, whereby monthly bond purchases are whittled down by $10 billion a month.

U.S. economic data due for release Monday includes the Empire State manufacturing survey, Treasury international capital data, industrial production and capacity utilization, and the NAHB housing market index. A major snowstorm in Washington, D.C. Monday could delay some of this data.

Source: Kitco