IN: Gold price rises most since August 6 on bargain-hunting
iNVEZZ.com, Tuesday, August 26: Gold was up the most in almost three weeks on speculation the low prices will spur physical demand as market participants consider risk premiums from the armed conflicts in Ukraine, the Middle East and North Africa.
On the New York Mercantile Exchange (NYMEX), December gold futures were up $8.6 a troy ounce to $1,287.5 as of 12:29 BST. It represents their biggest daily advance since August 6. Bullion tumbled to $1,272 on August 21, its lowest since June 18, after minutes of the Federal Reserve’s latest policy meeting revealed policy makers may raise borrowing costs sooner than expected.
James Moore, an analyst at FastMarkets Ltd. in London, told Bloomberg: “Gold may be picking up a little bit of bargain-hunting interest […] [Ukraine and the Middle East] are helping keep gold underpinned.”
Libya’s ambassador to Egypt, Mouhammad Jibreel, framed his country’s ongoing civil conflict as a “pan-Arabic security issue,” Morocco’s al-Alam newspaper reported. Jibreel also emphasised the “necessity for the international community to intervene to solve the Libyan crisis,” adding that his country has no “complexes” about foreign intervention.
The UAE has secretly sent airplanes on bombing sorties against militants in Libya over the past week, using bases in Egypt, US officials said, according to AFP. The raids were first reported by the New York Times and militants in Libya also said they had taken place.
A senior US official said yesterday president Barack Obama had authorised manned and unmanned reconnaissance flights over Syria, the New York Times reported. The Syrian government warned the White House that potential airstrikes against the Islamic State (IS) inside Syria had to be coordinated with Damascus or or it would view them as “an act of aggression”.
The US involvement in the civil war-torn country has so far been predicated on making sure no clear winner could emerge, in what one of the foremost experts on Syria Professor Joshua Landis once described as a “[r]ecipe for perpetual war.”
“[T]he US is playing a mischievous role. It is supporting rebels but making sure they cannot win,” Professor Landis said on May 28.
The US has been using its airpower to bomb positions of the IS in Iraq since before August 7. The recently revealed surveillance programme might be a first step toward airstrikes against the IS around the largely erased Iraq-Syria border. The IS controls large swaths of territory in north-eastern Syria and Western Iraq.
Russian president Vladimir Putin has arrived in Minsk for talks with member states of the Eurasian Customs Union, Ukraine and representatives of the EU. Putin’s spokesman Dimitry Peskov did not exclude the possibility of a bilateral meeting between him and Ukrainian president Petro Poroshenko.
Peskov said: “There are many issues for discussion [between Putin and Poroshenko] […] They include Ukrainian domestic crisis and terrible humanitarian catastrophe in the country’s east, and the necessity of the ceasefire,” the RT reported. The two presidents may also discuss “bilateral relations between [the] Russian Federation and Ukraine”.
Ukraine said yesterday an armoured column including 10 tanks entered from Russia, Bloomberg reported. The ICE U.S. Dollar index was almost unchanged at 82.55, having earlier hit 82.61 – its strongest since September 6, 2013. The index has gained 1.21 percent since May.
"I think people went short gold when it broke below the 200-day moving average but I would be surprised if it is going to be able to sustain this rally," Standard Bank analyst Walter de Wet told Reuters. "The dollar, despite today's pause, is quite strong and it looks like there is going to be quite a good durable goods number, which would give more signs of U.S. growth and in turn weigh on gold."
According to the International Monetary Fund, Russia and Kazakhstan upped their gold reserves, while Belarus, Ecuador and Mexico were among the countries that reduced them.
