Singapore: Gold was steady in early Wednesday trade after dipping overnight, but looked likely to hold above $1,300 an ounce as geopolitical tensions from crises in Ukraine and the Gaza strip brought safe-haven bids.
Fundamentals
Spot gold was little changed at $1,306.56 an ounce, after losing 0.4 percent in the previous session, pressured by firmer equities. U.S. gold was also flat at $1,307.30.
The metal rose last week after the downing of a Malaysian airliner over Ukraine, killing all 298 on board. US officials say pro-Russian separatists most likely shot down the jet by mistake, not realizing it was a civilian passenger flight.
Tensions eased on Tuesday after a train carrying the remains of some of the victims arrived in Ukrainian government territory and separatist leaders gave Malaysian authorities the aircraft's flight recorders.
In the Middle East, the situation remained tense with Israel pounding targets across the Gaza Strip on Tuesday, saying no ceasefire was near as top U.S. and United Nations diplomats pursued talks on halting the fighting that has claimed more than 600 lives. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.5 tonnes to 804.84 tonnes on Tuesday on safe-haven demand.
Gold will drift lower in the second half of 2014, leading to a second yearly drop in the average price after a dizzying decade-long rally, as US monetary policy returns to normal and Asian demand is weak, analysts forecast in a Reuters poll.
Palladium will reach its highest yearly price on record this year and could top that in 2015 as expectations for lower South African output combine with a recovery in demand and doubts over Russian supply, a Reuters poll showed.
Market News
Global equity markets and the dollar rode a rebound in risk appetite on Tuesday that lifted the S&P 500 to a record high on signs of cooperation from Ukraine's pro-Russian separatists over last week's downing of a Malaysian jetliner.
