Gold Advances as Investors Weigh Ukraine Against U.S. Stimulus

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Gold climbed as investors weighed escalating tension in Ukraine against the prospect of reduced stimulus in the U.S. Holdings in the biggest exchange-traded product expanded to the highest level this year.

Bullion for immediate delivery rose as much as 0.3 percent to $1,344.02 an ounce and was at $1,342.63 at 3:20 p.m. in Singapore. Prices posted a fifth weekly gain last week, climbing to a four-month high of $1,354.87 on March 3, as conflict between Ukraine and Russia worsened, boosting haven demand.

Bullion advanced 11 percent this year even as the Federal Reserve, which next meets March 18-19, announced a $10 billion reduction to bond buying at each of its past two meetings, leaving purchases at $65 billion. Ukraine began military drills as Russian forces tightened their hold on the Crimean peninsula.

“Gold looks like it’s stuck in range-trading,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner. The market will look to data for clues whether the Federal Reserve will continue to taper, while tension between Russia and Ukraine will help keep prices supported, To said in a report.

Holdings in the SPDR Gold Trust expanded 0.9 percent to 812.7 metric tons, extending a two-week increase. That’s the highest level since Dec. 20. Assets shrank by a record last year as prices plunged the most since 1981.

Gold for April delivery traded at $1,342.70 an ounce on the Comex in New York from $1,341.50 yesterday, when futures erased losses to settle 0.3 percent higher.

Silver for immediate delivery rose 0.5 percent to $20.9299 an ounce. Prices lost 0.6 percent yesterday after data showed exports in China slid in February by the most since 2009, raising concern growth may be faltering in the top metals user.

Platinum traded at $1,477.13 an ounce from $1,477.25, while palladium was little changed at $775.40 an ounce.

South Africa’s state mediator said that the Chamber of Mines has jeopardized talks aimed at ending a strike at the world’s largest platinum mines after an official from the lobby group accused the facilitator of incompetence.