Gold Holds Below 4-Month High as Investors Weigh Taper, Ukraine

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gsr-23145Gold traded below a four-month high as investors weighed the prospect of reduced stimulus in the U.S. against escalating tension in Ukraine. Holdings in the biggest exchange-traded product rose to the highest this year.

Bullion for immediate delivery was at $1,339.24 an ounce at 9:14 a.m. in Singapore from $1,339.72 yesterday. 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 demand for a haven.

Bullion rose 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 $1,339 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 was at $20.8071 an ounce from $20.8171 yesterday, when prices lost 0.6 percent 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 dropped 0.3 percent to $1,473.38 an ounce, while palladium lost 0.2 percent $774.08 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.