Gold Ends Near Flat as Traders Watch Ukraine, Middle East
New York (Aug 11) Gold futures ended flat on Monday as traders of the haven asset monitored continuing tensions in Ukraine, Iraq and Israel.
Gold for December delivery, the most active contract, settled 50 cents lower at $1,310.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices have climbed 8.8% this year as a series of geopolitical conflicts stoked investor demand for haven assets. Some investors believe gold will keep its value better than currencies or bonds during periods of uncertainty.
On Monday, Ukraine agreed to dispatch humanitarian aid, including supplies from Russia, to the separatist stronghold of Donetsk, amid pressure from Moscow and the West to ease civilian suffering. The move comes as the Ukrainian military said it was close to cutting off the city.
"The Ukrainian situation has the potential to tame itself a little bit, with the new move by Russia," said Ira Epstein, a broker with the Linn Group in Chicago.
Civilians in Gaza enjoyed relative calm on the first day of a 72-hour cease-fire in fighting between Israel and Hamas. Negotiators from both sides resumed indirect talks, mediated by Egypt, in an attempt to agree on a longer-term truce.
Meanwhile, the U.S. continued air strikes in northern Iraq over the weekend. The strikes succeeded at temporarily containing the radical Sunni group's advance through, U.S. Defense Secretary Chuck Hagel said Monday.
"Everything has tamed down, but none of those events have gone away and they could flare up at a moment's notice," Mr. Epstein said.
Still, gold's reaction to the news has been lackluster, reflecting a market that is unconvinced that these smoldering conflicts can catch fire, said Adam Klopfenstein, a senior commodities strategist with Archer Financial Services in Chicago.