Gold Climbs Toward Four-Month High as Ukraine Spurs Haven Demand

Frankfurt (Mar 11)   Gold climbed toward a four-month high in London as the standoff between Russia and Ukraine spurred demand for a haven. Silver advanced.

Ukraine began military drills as Russian forces tightened their hold on the Crimean peninsula, where residents will have the choice of joining Russia in a March 16 referendum. Ukraine’s prime minister prepared to meet U.S. President Barack Obama and western nations threatened further repercussions if Russia failed to defuse tensions.

Bullion advanced 12 percent this year, rebounding from the biggest annual drop since 1981, even as the Federal Reserve announced a $10 billion reduction to bond buying at each of its past two meetings, leaving purchases at $65 billion. Fed Chair Janet Yellen said last month the central bank will probably maintain its strategy of trimming the stimulus program. Global equities are within 1 percent of a six-year high set last week.

“The unsettled situation in the Ukraine continues to provide ongoing support for gold,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report written late last night. “Ukraine headlines and action in equities will likely be the most prominent price determinants for gold over the short-term.”

Bullion for immediate delivery rose 0.6 percent to $1,348.39 an ounce by 9:50 a.m. in London. It reached $1,354.87 on March 3, the highest since Oct. 30. Gold for April delivery added 0.5 percent to $1,348 on the Comex in New York, where futures trading volume was 15 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

ETP Holdings

Holdings in gold-backed exchange-traded products rose 8.4 metric tons yesterday, the most since October 2012, data compiled by Bloomberg show. Assets are at 1,762.5 tons after dropping to the lowest since October 2009 last month.

Source: Bloomberg