Singapore: Gold extended losses into a second session on Monday, slipping below $1,300 an ounce on technical selling and as equities recovered after an initial sell-off over escalating tensions in Ukraine.
Fundamentals
Spot gold had fallen 0.4 per cent to $1,299.54 an ounce, after dropping 0.6 per cent on Friday. US gold fell about $5 to $1,301. Gold prices dipped below the key psychological level of $1,300 an ounce after falling through support at the 50-day moving average near $1,304.
Ukrainian forces have raised their national flag over a police station in the city of Luhansk that was for months under rebel control, Kiev said on Sunday, in what could be a breakthrough in Ukraine's efforts to crush pro-Moscow separatists.
News on Friday that Ukrainian forces destroyed a Russian military column in Ukrainian territory initially hit Wall Street, drove down government bond yields and boosted safe-haven currencies like the yen and Swiss franc. US stocks eventually pared their losses as risk appetite partially returned.
Hedge funds and money managers boosted their bullish bets on gold futures and options for the first time in three weeks, as the metal's prices climbed on rising geopolitical tensions, the Commodity Futures Trading Commission said on Friday. The silver market ushered in a new era of electronic benchmarking on Friday after a regulatory drive for transparency brought the 117-year-old silver 'fix' to an end.
Persistently soft demand for gold in Asia has stoked worries that buying will fail to pick up in the second half of the year, when it is normally stronger, bullion traders and dealers said.
