Ukraine deal, ETF selling push gold price below $1,300
The price of gold ended the holiday-shortened week below the psychologically and technically important $1,300 level on Thursday after tensions between Russia and the West over Ukraine eased.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery settled at $1,293.90 an ounce, down $9.60 from yesterday's close and suffering a 1.9% drop for the week.
Top diplomats from the United States, European Union, Russia and Ukraine in marathon talks on Thursday agreed to take steps to ease the crisis which took away some of the allure of gold as a safe haven asset.
Russia sidestepped tougher economic sanctions in the process and worries over energy supply in Europe, which buys much of its natural gas from Russia, receded.
The agreement, hammered out over seven hours of talks, calls for the disarming of all militia groups and for control of buildings seized by pro-Russian separatists in the east of the country to be handed over to Ukrainian authorities in return for amnesty.
The gold price was also hurt by renewed profit-taking ahead of the Good Friday long weekend when many markets in the West will be closed for trading.
Investors continued to pull money out of the SPDR Gold Trust (NYSEARCA:GLD), the world's largest physically-backed gold ETF accounting for some 40% of total holdings in the industry.
Holdings in GLD dropped to 795.1 tonnes or 25.5 million ounces on Thursday, the lowest level since February and down 26.4 tonnes in less than three weeks.
Image of statue of Lenin in Illichivsk in the Odessa Oblast by lentina_x