Gold up as Ukraine, China prompt safe-haven bids
Singapore, March 13, 2014
Gold extended gains to a third session on Thursday, scaling fresh six-month highs as investors sought to hedge their bets against geopolitical tensions in Ukraine and economic slowdown fears in China.
Markets are eyeing more data from China due on Thursday to determine the state of the economy, after a recent bond default and a weak exports report sent equities and base metals lower.
Gold is seen as a safe-haven asset during times of economic and political uncertainty, when the metal is preferred by investors over riskier assets such as equities. It has gained 14 percent so far this year on the global uncertainties.
Spot gold rose 0.4 percent to $1,371.80 an ounce by 0309 GMT, after jumping 1.3 percent on Wednesday. The metal earlier on Thursday hit $1,374.45, its highest since September 19.
Technical buying has also been supportive of price momentum in the last two sessions, especially after prices cleared a recent high near $1,355 an ounce.
"Given bullion's technical break, it may be at risk of profit-taking in the near term, barring an escalation of Eastern European tensions," HSBC analysts said in a note.
"Geopolitical events can have a pronounced, but sometimes short-lived impact on gold."
Reuters technicals analyst Wang Tao said spot gold faces resistance at $1,375-$1,377, a break above which will open the way towards $1,433.31, the Aug 28 high. - Reuters