Gold rises on Ukraine, Gaza tensions
The price of gold rose Monday as heightened tensions over Ukraine and the Gaza strip bolstered demand for the precious metal.
Gold futures for August delivery changed hands at $1,315.90 an ounce in afternoon trading on the Comex in New York, up $4.90, or 0.37%, from the previous close of $1,311.00.
U.S.-Russia relations are increasingly strained in connection with the downing of Malaysia Airlines Flight MH17 in eastern Ukraine last Thursday.
According to the New York Times, U.S. Secretary of State John Kerry said Sunday that Moscow had trained pro-Russia separatists in Ukraine to use the long-range rockets believed to have shot down the civilian aircraft.
Gold posted its biggest advance in a month Thursday on safe-haven buying after the Malaysian passenger jet went down.
But the yellow metal retreated the following day as concern about the timing of a U.S. interest rate hike eclipsed geopolitical worries.
Amid political or financial turmoil, market participants tend to buy gold, seen as a safe-haven investment.
The ongoing conflict in Gaza, with an Israeli ground offensive that began Thursday night adding to casualties, has provided gold with additional support.
“Escalation of sanctions on Russia and more geopolitical problems in Gaza are keeping gold supported,” George Gero, a vice president and precious-metals strategist at RBC Capital Markets in New York, was quoted by Bloomberg as saying.
“There are enough fundamentals to keep prices over $1,300 for some time,” Gero said.
Buying on the part of emerging markets may buttress gold going forward, BoA/ML analyst Michael Widmer was quoted by Platts as saying.
"We believe that physical demand from emerging markets will gain further clout in the medium term as countries get more affluent, suggesting the worst may be behind the gold market," Widmer said.