Gold prices at three week high due to Ukraine crisis
Gold futures rose to the highest in almost three weeks as escalating tensions between Ukraine and pro-Russian separatists boosted haven demand.
Pro-Russian separatists killed four Ukrainian troops, wounded 30 and shot down a military helicopter in the eastern city of Slovyansk, the Defense Ministry said on its website. Several civilians also died in the fighting, the Interior Ministry said in a statement, without giving a number.
This year, gold has advanced 8.9 percent as the conflict prompted traders to unwind bets on price declines. Ukraine's presidential election is driving another rift between Russia, the European Union and the US as Vladimir Putin's government questions the legitimacy of the May 25 vote.
"Civil unrest in Ukraine has everyone nervous about the integrity of the May 25 elections and the stability of the region," Steven Scacalossi, the head of global-metal sales at TD Securities in Toronto, said in a note.
Gold futures for June delivery gained 0.5 percent to settle at $1,309.30 an ounce at 1:42 p.m. on the Comex in New York. Earlier, the price reached $1,315.80, the highest for a most- active contract since April 15.
Trading was 9.5 percent less than the 100-day average for this time, according to data compiled by Bloomberg. Markets in London and Tokyo were closed for holidays.
On May 2, gold rose 1.5 percent, the most in seven weeks, on the turmoil in Eastern Europe. That snapped a four-day decline, the longest slump in a month. Speculators are the least bullish on the metal in 11 weeks, partly amid signs that the U.S. economy is accelerating out of its winter retreat, government data showed on May 2.
"We still believe the range for gold is $1,260-$1,330, but clearly it will now likely challenge the upper end of that range," Scacalossi said.
Gold tumbled 28 percent in 2013, the most since 1981, as US equities rallied to a record and inflation remained muted, while the Federal Reserve started tapering monetary stimulus amid signs of a rebound in the labor market.
On May 2, holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, extended a decline to the lowest since January 2009.
Silver futures for July delivery rose 0.1 percent to $19.571 an ounce on the Comex. On May 1, the price touched $18.685, the lowest since July 8.
On the New York Mercantile Exchange, platinum for July delivery climbed 0.5 percent to $1,448.40 an ounce. Earlier, the price reached $1,454.90, the highest since April 15.
Palladium futures for June delivery rose 0.5 percent to $816.50 an ounce. On May 1, the price reached $819.30, the highest since Aug. 3, 2011.
In South Africa, the world's top platinum producer, the Association of Mineworkers and Construction Union said moves by companies to make pay offers to workers directly to end a 14- week strike may destabilize the industry.