Gold prices to rally this week on Ukraine and China worries
Gold prices are expected to build on its recent gains this week, as concerns over China's economy and the crisis in Ukraine will keep pushing the precious metal up, say 84% of the experts interviewed in the latest Kitco Gold Survey.
From the 25 gold dealers, investment banks, futures traders, money managers and technical-chart analysts quizzed, 21 said they predicted gold prices to rise next week, while only two anticipated that prices would drop and two others forecasting prices to remain unchanged.
Bullion prices closed at $1,382 on Friday, the highest level in six months, and the sixth straight weekly rise. Last week alone gold accumulated a 2% gain, which highlights the precious metal’s role as a perceived haven from global turmoil.
Gold for April delivery, the most active contract, gained $6.60 to settle at $1,379.00 a troy ounce on the Comex division of the New York Mercantile Exchange, up 3% on the week. This is the highest value reached since Sept. 9.
The metal’s rally —up 14% so far this year— is also translating into larger inventories at gold-backed exchange-traded funds. SPDR Gold Shares, the world’s largest gold ETF, saw its bullion hoard grow 2.1 metric tons on Thursday to 813.3 tons. The fund’s inventories are up 1.9% this year and are on track for their second monthly increase after 13 straight months of declines.
Traders were closely following Sunday’s poll in Ukraine's Crimea region, as residents voted overwhelmingly to secede from Ukraine and join Russia. The US and Europe condemned the ballot as illegal and destabilizing and were expected to slap sanctions against Russia for it.
The increased geopolitical tensions, analysts agree, will affect gold prices. Russia is said to face strong sanctions Monday by the US and Europe over the vote, which could also encourage rising pro-Russian sentiment in Ukraine’s east and lead to further divisions in this nation of 46 million.
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