Silver & gold strengthen as tensions rise in Ukraine
Frankfurt (Feb 27) Gold prices and most other metals advanced on Thursday after tensions in the Ukrainian political conflict escalated and lured investors into safe-haven assets.
Gold for April delivery /quotes/zigman/10060693/realtime GCJ4 +0.27% gained $4.60, or 0.4%, to $1,332.60 an ounce in electronic trade. March silver /quotes/zigman/9576868/realtime SIH4 +0.05% advanced 13 cents, or 0.6%, to $21.39 an ounce.
The gains came as volatility spread across financial markets after pro-Russian gunmen stormed parliament buildings in Ukraine’s Crimean region and raised Russian flags early Thursday. After the incident, Ukraine’s acting president warned that any movements by the Russian military in Crimea, aside from the Russian Black Sea fleet’s base in Sevastopol, would be treated as an act of aggression. NATO chief Anders Fogh Rasmussen, via his Twitter account, urged Russia not to take any action that would “escalate tension.”
Fawad Razaqzada, technical analyst, at FOREX.com said in a note that the deteriorating situation in Ukraine boosted safe-haven assets like silver and gold, although the stronger dollar capped gains.
“The fact that both metals are currently above their respective 200-day [moving averages] suggests the trend remains bullish and that yesterday’s selling was caused, above all, by profit-taking,” he said.
On Wednesday, gold futures closed back below $1,330 an ounce as surprisingly strong monthly new-home sales figures drew investors to stocks and the U.S. dollar — and away from precious metals.
Commerzbank’s Eugen Weinberg said that the ongoing high level of gold demand in China played a key role in January’s rally, and he believes it should continue.
“Contrary to media reports, gold demand in China has not cooled noticeably in our view,” he said. “Chinese demand will continue to serve as a key crutch for the gold price in 2014, too.”
On the economic front on Thursday, orders have been slowing for American manufacturers over the past few months, and we’ll likely see by how much in January’s report on durable goods, which comes out at 8:30 a.m. U.S. Eastern time. Separately, jobless claims are forecast to hold steady at around 335,000.
Elsewhere in metals trading, April platinum /quotes/zigman/13743788/realtime PLJ4 +0.90% advanced $8.80, or 0.6%, to $1,437.90 an ounce, while March palladium /quotes/zigman/13222141/realtime PAH4 +0.18% put on $3.95, or 0.5%, to $735.45 an ounce.
High-grade copper for March delivery /quotes/zigman/678454/realtime HGH4 -0.37% gave up a penny to $3.24 a pound.