Gold fear trade returns on Ukraine escalation

The price of gold fell scaled the 1,300 an ounce level on Tuesday as safe-haven buyers returned to the market amid fears of an escalating crisis in Ukraine.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery in late afternoon trade exchanged hands for $1,309.90 an ounce, up more than $10 from yesterday's close.

Gold was supported by investors seeking the relative safety of gold as a hard asset after tensions between the West and Russia rose and unrest within Ukraine spread and turned more violent.

Ukraine's embattled acting government launched what it calls "anti-terrorist" operation in the southeastern city of Kharkiv and arrested about 70 separatists for seizing the regional administration building according to a statement from the Interior Ministry.

Government buildings in two other cities in predominantly Russian-speaking cities in eastern Ukraine were also seized by pro-Kremlin groups with protesters in Donetsk declaring a free republic.

Russia’s foreign ministry in response warned that any use of force by Ukrainian authorities to dislodge separatists could unleash a civil war.

In turn US and Nato accused the Kremlin of fomenting the unrest and calling the demonstrations the work of pro-Kremlin saboteurs. US Secretary of State John Kerry speaking to the Senate Foreign Relations Committee, said:

"No one should be fooled — and believe me, no one is fooled — by what could potentially be a contrived pretext for military intervention just as we saw in Crimea. It is clear that Russian special forces and agents have been the catalysts behind the chaos of the last 24 hours."

The Washington Post has an infographic that shows only one in six Americans know where the Ukraine is located and the less US citizens know about Ukraine’s location, the more they want US to intervene with military force.

Image of Ukraine protesters via Vice News