Monday 18 August 2014

Gold extends losses to below $1,300 as equities gain

Gold extended losses into a second session on Monday, slipping below $1,300 an ounce as equities recovered after an initial sell-off over escalating tensions in Ukraine. 

Spot gold had fallen 0.4 per cent to $1,299.80 an ounce by 0314 GMT, after dropping 0.6 per cent on Friday. US gold fell about $5 to $1,300.90. 


Asian stocks eked out gains on Monday after seeing Wall Street recover from the latest round of tensions in the Ukrainian crisis, although renewed uncertainty over the volatile conflict put a firm lid on markets. 

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. 

Markets were eyeing developments on the geopolitical front for cues. Ukrainian forces 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. 

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