Gold rose for a second day in London as investors weighed haven demand from tension over Ukraine against signs the U.S. economy is improving.
Geopolitical unrest helped gold gain 7.5 percent this year. Russian President Vladimir Putin ordered his government to respond to U.S. and European sanctions as Poland said yesterday a renewed buildup of Russian troops on Ukraine’s border raises the specter of a possible invasion.Israel withdrew troops from the Gaza Strip on the first day of a 72-hour cease-fire.
Prices have retreated from a three-month high set July 10 amid signs the U.S. economy is strengthening. The dollar traded near a five-month high versus 10 major currencies after Federal Reserve Bank of Dallas President Richard Fisher said yesterday U.S. policy makers were becoming more “hawkish” and data showed factory orders and service activity increased.
“With the Russians once again massing troops on the Ukraine border and the world watching to see if Israel/Hamas keep to the cease-fire, I doubt many people will want to short gold here,” David Govett, head of precious metals at Marex Spectron Group in London, said in a note today. Still, a stronger dollar curbed the appeal of precious metals, he said.
Gold for immediate delivery rose 0.2 percent to $1,291.81 an ounce by 8:51 a.m. in London, according to Bloomberg generic pricing. It’s rebounded from $1,279.30 on Aug. 1, the lowest since June 19. Gold for December delivery gained 0.6 percent to $1,292.70 on the Comex in New York.
Futures trading volume was 50 percent below the average for the past 100 days for this time of day.
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