Gold Dropped Below 4-Months High On Ukraine Crisis Worries

Eye on Equities  |  2014-03-06 02:41:31   |   By

Gold was found to trade below its 4-month high owing to the worries of investors regarding the Ukraine crisis.

NEW YORK (Scrap Monster) : Gold was found to trade below its 4-month high owing to the worries of investors regarding the Ukraine crisis. In addition, the outlook of US economical data along with the decline of Chinese physical purchases has also reflected in the price plunge of gold. These factors seem to have affected the trading of gold below its highest level in four months. The slowdown of purchase in China, which is the world’s largest gold consumer, has weighed largely on the gold price currently.

Gold bullion for quick delivery was found to trade at $ 1,338.40 an ounce in Singapore yesterday from $ 1.336.90. Gold price in the previous day had climbed 0.2 % owing to the release of a report of US job adding than projected in February.  On March 3, gold mounted to $ 1,354.87, which reported highest since October 30 last year. The gold price reflected the heightened tensions between Russia and Ukraine.

Gold was seen to rally 11 % in 2014 due to the speculation of US recovering and the unrest of emerging market in Ukraine. It was found to boost the demand of gold as safe-haven. Bullion price recovered from the 28 % plunge in 2013 seen as the worst loss since 1981 in spite of Fed Reserve’s scaling back of stimulus.

In spite of the improvement of situation between Russia and Ukraine, the demand for a safe-haven still persists due to the uncertainly of the tension. According to traders, tapering is not expected to alter unless weak US economic data arises. Physical buyers are not interested above $ 1,300.

Meantime, SPDR Gold Trust Holdings remained unaltered yesterday for the sixth day showing the longest stretch asset which was held steady in 13 months.