Gold prices bounced back in New York as increasing tensions between Russia and Ukraine bolstered utility of the metal as a haven.
Ukraine had military vehicles and armaments taken to retake Slovyansk, which is dominated by Pro-Russian militants, going against President Vladimir Putin’s demand for troops to retreat with Russia’s soldiers having taken positions along the border.
Gold earlier dropped as low as 0.7% after US Labor Department data showed that payrolls surged in April by the most in two years, according to Bloomberg.
Bullion added 6.7% in 2014 through yesterday in the wake of signs of wavering growth of the US economy and escalating political tensions in Eastern Europe.
“Despite the upbeat jobs outlook and improving U.S. economic outlook, traders still remain focused on the larger geopolitical risks as things in Ukraine are starting to take another downturn ahead of a long weekend,” said Phil Streible of Chicago-based R.J. O’Brien & Associates.
He added that the latest developments are the sort that worries investors, pushing them to seek security in gold.
The per-ounce prices of June delivery gold futures advanced 1.3% to $1,299.80 as of 11:11 am on the Comex in New York, approaching the biggest surge since April 4.
Prices also advanced after stocks in the Standard and Poor’s 500 reversed gains, reviving the search for alternative investments.
As Investing reports, the June contract traded at 0.96% lower on Thursday.
The past four sessions saw prices drop 1.3%. The Federal Reserve cut its bond purchasing to $45 billion on April 30 with the fourth consecutive $10 billion reduction. Policy makers said that the Fed was likely to cut asset purchases further but at a gradual pace.
Gold soared 70% between December 2008 and June 2011 as the Federal Reserve bought debt and reduced interest rates to a record with a view to boosting the economy.
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