Gold rises on concerns over Ukraine, Russia stand-off
New York (Aug 12) Gold prices rose on Tuesday as signs emerged that the stand-off between Russia and Ukraine was hurting confidence in the euro zone economy, and as U.S. bond yields held near their lowest in 14 months.
Spot gold was last up 0.6 percent at $1,317 an ounce, while U.S. gold futures for December delivery rose 0.5 percent to $1,316 an ounce.
Anxieties over the Ukraine crisis and how this might impact future business hit economic sentiment in Germany, the ZEW think-tank said on Tuesday as it reported a fall in investor morale to its lowest level since December 2012.
That helped push the euro lower, while boosting German Bund futures. While jitters over Ukraine have fuelled some buying of gold as a safe store of value, the resulting strength in the dollar has kept it within a narrow range, analysts said.
"While gold may rise and fall with the ebb and flow of geopolitical news, we're still stuck in this range between $1,280 and $1,340, as we have been for the last month and a half,'' Mitsubishi analyst Jonathan Butler said.
"Unless we see another major change, I don't think the current news is going to lead us to break out of that range,'' he said. "We'll be watching geopolitical situation carefully.''
Russia said a convoy of 280 trucks had left for Ukraine on Tuesday carrying humanitarian aid, amid Western warnings against using help as a pretext for an invasion.
Elsewhere, Iraq's new prime minister-designate won swift endorsements from uneasy mutual allies the United States and Iran as he called on political leaders to end crippling feuds that have let jihadists seize a third of the country.
Gold has gained about 9 percent this year, largely on tensions between the West and Russia over Ukraine and violence in the Middle East. The metal is seen as an alternative investment to riskier assets such as equities.
It has also benefited from a drop in bond yields, analysts said, with benchmark 10-year Treasury yields lingering not far from last week's 14-month low.
Source: Reuters
