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Gold inches up on Ukraine unease

Published 05/09/2014, 02:05 PM
Updated 05/09/2014, 02:07 PM
Ukraine tensions send gold prices up

Investing.com - Gold prices edged up in U.S. trading on Friday as Ukraine inched closer to civil war, which bolstered the yellow metal's safe-haven appeal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at 1,287.80 a troy ounce during U.S. trading, up 0.01%, up from a session low of $1,285.60 and off a high of $1,294.50.

The June contract settled down 0.09% at $1,287.70 on Thursday.

Futures were likely to find support at $1,285.60 a troy ounce, the earlier low, and resistance at $1,314.70, Wednesday's high.

In Europe earlier, pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum on self-rule and said they plan to go ahead on Sunday with a vote that some fear could lead to a civil war.

European Commission President Jose Manuel Barroso said earlier that the European Union was still struggling to agree on what approach to take on the crisis and added the event was the biggest threat to European security since the fall of the Berlin Wall.

Events in Ukraine spooked investors and boosted demand for gold.

Elsewhere, investors continued to track European monetary policy.

The European Central Bank this week left interest rates unchanged at 0.25%, though the euro dropped after ECB President Mario Draghi said the bank's governing council is comfortable with acting at its next meeting after the bank publishes fresh inflation and growth forecasts.

Draghi attributed weak inflation rates to food and energy prices, but added that the strong euro and weak domestic demand are also pushing down inflation.

He reiterated that the ECB does not have a target for the euro exchange rate but stressed that the bank would closely monitor exchange-rate developments.

Market talk that fresh easing measures or rate cuts softened the euro and boosted the dollar, which capped gold's gains because the precious metal tends to trade inversely with the greenback.

The bank will meet on June 5 to discuss monetary policy.

Meanwhile, silver for July delivery was down 0.14% at $19.112 a troy ounce, while copper futures for July delivery were up 0.76% at $3.086 a pound.

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