Gold heads for weekly rise as political, economic risks lift demand

NEW YORK (April 14) - Gold wobbly on Thursday as risk appetite recovered, but was still on track for a weekly gain buoyed by safe-haven demand amid the Ukraine crisis and mounting price pressures.

Spot gold dipped 0.2% to $1,973.41 per ounce as of 1100 GMT, after a six-session winning streak. U.S. gold futures dropped 0.6% to $1,973.30.

"The main move was on Tuesday when we saw the (U.S.) CPI (Consumer Price Index) numbers and although they were pretty much in line with expectations ... gold still reacted to the order of $15-$20 or so, and has been consolidating since then," StoneX analyst Rhona O'Connell said.

Other data showed U.S. monthly producer prices increased by the most in more than 12 years in March, the latest sign of persistently high inflation that could compel the Federal Reserve to aggressively tighten monetary policy. read more

Stock markets made slim gains on Thursday ahead of a European Central Bank (ECB) meeting, as U.S. Treasury yields eased and the dollar retreated on hopes that inflation may be close to peaking.

The ECB may outline a clearer schedule for unwinding its extraordinary stimulus measures, as worries over inflation trump concerns about a war-related recession. read more

Gold has gained about 1.4% so far in the holiday-truncated week. Most markets will be closed on Friday for a holiday.

"One of the factors that has lent buoyancy to gold in recent days has been strong buying interest on the part of ETF (Exchange Traded Fund) investors," Commerzbank analyst Daniel Briesemann said in a note.

"We believe this is due to news about the Ukraine war – Russia appears to be preparing to launch a major offensive in the east of the country – that is generating considerable demand for gold as a safe haven," Briesemann said. read more

Spot silver dropped 0.5% to $25.58 per ounce and platinum dipped 0.8% to $978.58, while palladium rose 1.7% to $2,354.44.

REUTERS