Gold spikes as airliner shot down in Ukraine

Pro-Russian rebel posing with a heavy machine gun. Photo: Igor Golovniov/Shutterstock.com

Gold jumped Thursday on reports that rebels shot down a Malaysian passenger jet in eastern Ukraine, increasing geopolitical tensions and demand for the precious metal, whose price plunged earlier this week.

The most active contract, gold futures for August delivery, changed hands at $1,318.00 an ounce in early afternoon trading on New York’s Comex, surging $18.20, or 1.40%, from yesterday’s close of $1,299.80.

All 295 people aboard flight MH-17 from Amsterdam to Kuala Lumpur were killed when the Boeing 777 went down about 40 km from the Russian border, Reuters reported.

According to the news agency, Anton Gerashchenko, an official with Ukraine’s Interior Ministry, said that the civilian airliner had been “shot down by a Buk anti-aircraft system.” Further details remain unclear.

Intensifying conflict in Ukraine between pro-Russian militants and forces loyal to Kiev since earlier this year has helped drive demand for gold, which investors see as a safe-haven investment in times of political or financial turmoil.

Despite suffering a sharp two-day fall at the start of this week, the yellow metal has experienced double-digit gains this year, hitting a 3.5-month high on July 10.