Gold up on Ukraine tensions, but gains pared

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The price of gold rose for the third straight day Thursday as mounting tensions in Ukraine and declines in equities worldwide reinforced safe-haven demand for the precious metal.

Spot gold changed hands at $1,289.80 an ounce around 1:00 p.m. EST, up from Wednesday’s close of $1,282.70.

Gold futures for December delivery traded at $1,290.80 per ounce in the afternoon on New York’s Comex, up $7.40, or 0.58%, from $1,283.40 seen Wednesday.

Ukraine said Thursday it would do everything possible to defend itself from what it called an invasion involving Russian troops seizing a town and several villages near the shared border, The Wall Street Journal reported.

The news sent global stocks lower and pushed gold to $1,297.60 an ounce, the highest level since August 20, the newspaper said.

Investors tend to buy gold as a kind of insurance in times of political or financial turmoil.

Advance pushed back

But the gains were pared by U.S. economic data showing stronger second-quarter growth than first thought and the related possibility of higher borrowing costs in the country, Reuters reported.

When interest rates rise, investors generally move from gold, which pays no interest, to assets that do.

"The market woke up on geopolitical headlines around Ukraine but we gave up some gains because of very strong U.S. economic data," VTB Capital analyst Andrey Kryuchenkov was quoted by the news agency as saying.

In addition, improving U.S. jobs data boosted the dollar, which increased downward pressure on the yellow metal.

The dollar usually moves inversely to gold, which is traded in dollars and gets pricier for buyers using other currencies.