Singapore: Gold held overnight gains to trade near its highest in over a week on Thursday as fears of Russian military action against Ukraine and heightened tensions between Moscow and the West burnished gold's appeal as a safe-haven.
Fundamentals
Spot gold rose 0.1 per cent to $1,307.60 an ounce, after gaining 1.4 percent on Wednesday. The metal hit $1,309.60 in the previous session - its highest since July 29. US gold was steady at $1,308.90 after rising 1.8 per cent in the previous session.
Russia will ban all imports of food from the United States and all fruit and vegetables from Europe, the state news agency reported on Wednesday, a sweeping response to Western sanctions imposed over its support for rebels in Ukraine.
NATO said Russia had massed around 20,000 combat-ready troops on Ukraine's border and could use the pretext of a humanitarian mission to invade. It was the starkest warning yet from the Western alliance that Moscow could mount a ground assault on its neighbour.
A batch of disappointing data from Italy and Germany on Wednesday also helped boost gold's demand. Gold is seen as an alternative investment to riskier assets such as equities, especially during economic and geopolitical uncertainties. However, investor sentiment in bullion still seemed fragile on persistent worries over possible tightening of monetary policy in the United States. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw its holdings fall 2.4 tonnes to 797.65 tonnes on Wednesday.
