Gold futures stayed on course for the longest rally in six weeks, as increasing tension between Russian and Ukraine triggered the metal’s safe haven appeal.
Russia is facing additional sanctions from the Group of Seven nations, according to German Chancellor Angela Merkel, after US said Russia was employing armed violence and mob force to advance its intentions on Ukraine.
Gold hit a six-month peak in March after Russia annexed Crimea.
“The market has gotten very nervous over this situation. What we’re seeing here is some recent shorts, based on technical selling, have come back to cover their positions,” Bill OâNeill of Logic Advisor in New Jersey told Bloomberg by phone.
June delivery futures gained 0.9% to $1,301.70 per ounce as of 11:27am on the Comex in New York, approaching a third consecutive gain that would make it the longest winning streak since March 14. Prices added 0.7% in the two prior sessions.
The precious metal has surged 8.3% this year, following the rise in demand because of the conflict between Russia and Ukraine. In China, the amount of spot gold contract traded in Shanghai soared yesterday to a peak witnessed two months ago.
As the Wall Street Journal reports, the Ukraine government said it plans to proceed with the onslaught against pro-Russian separatists in the eastern region of the country on Friday, with the aim of isolating the city of Slovyansk, where insurgent have pitched camp, as opposed to going directly for the militants and exposing civilians to risks.
A day before, Ukrainian troops moved on militants, killing several of them, but paused the offensive after Russia readied thousands of troops it had brought along the country’s border.
Investors are seeking to acquire gold before the weekend, just in case developments in Ukraine turn for the worse, said Adam Klopfenstein of Archer Financial Services.
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