Gold holds below $ 1,300 on easing Ukraine concerns

Bareksa.com - Gold was trading below $1,300 on Thursday, following its biggest drop in three weeks, as its safe-haven appeal dimmed on signs of easing tensions in Ukraine.  

Russian President Vladimir Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held, potentially pulling Ukraine back from the brink of violent dismemberment. 

In what could be a breakthrough in the worst crisis between East and West since the Cold War, Putin also announced he was pulling Russian troops back from the Ukrainian border.

Much of gold's 7 percent gains this year has been from geopolitical tensions over Ukraine. Gold is often bought as a safe-haven investment at times of economic and political
uncertainty.

"The outlook for gold from here is dependent on how things evolve in Ukraine," said Barnabas Gan, an analyst at OCBC Bank.

"We are still bearish on gold prices and expect prices to be $1,150 by year-end on expectations that the Ukraine situation will not blow up," he said.

Spot gold edged up slightly to $1,291.55 an ounce by 0624 GMT, after losing 1.4 percent on Wednesday - its biggest one-day drop since April 15. U.S. gold also stabilized
after a similar drop overnight.

"The negative momentum built up overnight is likely to skew market sentiments towards the bears. The lacklustre rebound this morning testifies to the lack of meaningful buying interest ever 

Bullion was also affected by gains in stocks after comments from Federal Reserve Chair Janet Yellen.

A slumping housing market and geopolitical tensions risk undermining the U.S. economy and bear close watching by the Fed, the central bank's chief said in a testimony to Congress, adding that the economy was still in need of lots of support given the "considerable slack" in the labour market. 
 

In the physical markets, gold premiums in top buyer China steadied near $2.50 an ounce on Thursday.
 

Prices at 0624 GMT 
 <span 1.6em;"="">Metal                               Last     Change  Pct chg

                                           
 Spot gold                         1291.55    2.61       0.2
 Spot silver                            19.24   -0.06     -0.31
 Spot platinum                   1432.75    4.15      0.29
 Spot palladium                  799.75     4.25      0.53
 Comex gold                      1291.6     2.7         0.21
 Comex silver                     19.295    -0.047     -0.24
 Euro                                1.3914                  
 DXY                                 79.197                  
                                           
 COMEX gold and silver contracts show the most active months (Source : Reuters)