Gold Near Two-week High as Ukraine Tensions Boost Safe-haven Bids

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April 9, 2014 2:21 PM EST

Gold was trading near its highest in two weeks on Wednesday, holding on to sharp overnight gains, as rising geopolitical tensions over Ukraine burnished its safe-haven appeal.

Reuters
Gold Near Two-week High as Ukraine Tensions Boost Safe-haven Bids

However, investors continued to pull money out of gold-backed exchange-traded funds, raising the risk that the price gains would be short lived.

FUNDAMENTALS

* Spot gold rose nearly 0.1 percent to $1,309.22 an ounce by 0021 GMT, after gaining 0.9 percent in the previous session. The metal hit a two-week high of $1,314.43 on Tuesday.

* U.S. Secretary of State John Kerry accused Russian agents and special forces of stirring separatist unrest in eastern Ukraine, saying Moscow could be trying to prepare for military action as it had in Crimea.

* The rising tensions increased gold's safe-haven appeal, while a lower greenback made the dollar-denominated metal more attractive for holders of other currencies.

* Holdings in SPDR Gold Trust, the world's largest gold-backed ETF, fell 2.7 tonnes to 806.48 tonnes on Tuesday. The fund has not seen any fresh inflows since March 24.

* As a strike by South African platinum miners enters its eleventh week, the likelihood that employers will bow to demands for better pay is receding and a drastic overhaul of the loss-making industry is looking more inevitable.

* Iraq's central bank may buy more gold in coming months depending on investment needs, the country's finance minister said.

MARKET NEWS

* The dollar languished at three-week lows against a basket of major currencies on Wednesday, having broken decisively lower as the yen squeezed higher and even the euro gained a tailwind.

(Photo: Reuters / )
Gold Near Two-week High as Ukraine Tensions Boost Safe-haven Bids
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