Gold price gives up strong early gains

The gold price on Friday briefly broke through a key technical level on Friday on the back of safe haven buying amid the crisis in the Crimea.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery – the most active contract – last traded at $1,376.60 an ounce, up $4.20 from yesterday's close, but way off its highs for the day.

In busy trading of almost 150,000 contracts by lunchtime, the metal hit a high of $1.388.40 an hour into New York trade, the best level since early September and up close to 16% since the start of the year.

Reports surfaced yesterday of Russian troops amassing on Ukraine's borders while Nato announced the deployment of fighter jets to countries on Ukraine's western borders. For its the part Ukraine began mobilizing its new volunteer force, the national guard.

US Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov were meeting in London, but hopes for any progress in the talks were slim. Voters in the Crimea, where 60% of the population are Russian speakers, go to polls on Sunday to decide whether to become again a part of a greater Russia.

The US Federal Reserve's policy setting committee meets next week and will announce its interest rates decision on Wednesday. Janet Yellen, will chair the Federal Open Market Committee Meeting for the first time, and no drastic changes to monetary policy is expected, including further reductions in the bank's quantitative easing program.

Geopolitical developments are set to overshadow any decisions announced by the Fed and US economic data out next week which include industrial production, inflation and housing starts numbers.

Silver also advanced on Friday adding over 2% to $21.64 in morning trade before pulling back. Platinum at $1,473 and palladium at $775 again traded in negative territory despite the ongoing platinum strikes at three mines in South Africa which is responsible for more than 60% of world production.

The copper price stabilized after this week's sharp drop. The red metal in afternoon dealings changed hand at just under $2.95 a pound, recovering slightly from a dismal week which saw it reached the lowest level since June 2010.