BLBG: Gold Holds Above Three-Day Low as Ukraine to U.S. Weighed
Gold held above a three-day low in New York as investors weighed tension over the downing of a passenger aircraft in Ukraine against the outlook for an improving U.S. economy.
The dollar was little changed near a one-month high against 10 major currencies after data yesterday that showed U.S. home sales climbed to an eight-month high and before a report tomorrow that may show slowing European manufacturing. Bullion, which dropped 0.6 percent yesterday, slid 28 percent last year on expectations for reduced U.S. stimulus.
Prices have rebounded 8.9 percent this year partly as tensions in Ukraine and the Middle East spurred haven demand. The European Union yesterday threatened to restrict Russia’s access to capital markets and sensitive energy and defense technologies unless President Vladimir Putin expedites a probe into the downing of the Malaysian passenger jet.
“Without the current geopolitical risks, gold would not be able to hold on to prices above $1,300,” UBS AG analysts wrote in a report today. “Such risks are holding potential shorts back. Gold reacted to U.S. economic data releases and subsequent movements in the foreign-exchange market, but follow-through was lacking. The overall muted tone remained in place.”
Gold for December delivery added 0.1 percent to $1,309.60 an ounce by 7:40 a.m. on the Comex in New York. Prices fell to $1,304.20 yesterday, the lowest since July 17. Bullion for immediate delivery rose 0.1 percent to $1,307.54 in London, according to Bloomberg generic pricing.
Trading Volume
Futures trading volume was 19 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.
While Russia has denied supplying rebels with the type of missile that is suspected of downing the Malaysia Airlines plane, U.S. intelligence officials said yesterday that satellite images suggest a surface-to-air missile fired from rebel-held territory in Ukraine brought down the airliner.
Diplomatic pressure to halt more than two weeks of fighting between Israel and Gaza Strip militants mounted as U.S. Secretary of State John Kerry flew to Israel to press for a cease-fire. Palestinian President Mahmoud Abbas said yesterday that he has proposed his own cease-fire initiative, which, like Egypt’s, would involve an immediate cessation of hostilities to be followed by talks. Hamas hasn’t confirmed Abbas’s assertion late yesterday that it accepted his proposal.
Silver for September delivery was little changed at $21.015 an ounce in New York. Platinum for October delivery fell 0.2 percent to $1,485.80 an ounce. Palladium for September delivery lost 0.2 percent to $872.50 an ounce. It reached a 13-year high of $890 on July 17.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net John Deane, Sharon Lindores
