Gold extends gains as Ukraine unease grows

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Investing.com - Gold prices edged up in U.S. trading on Monday after Ukrainian separatists over the weekend voted in favor of self rule, 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 1,296.30 a troy ounce during U.S. trading, up 0.68%, up from a session low of $1,278.30 and off a high of $1,303.90.

The June contract settled down 0.01% at $1,287.60 on Friday.


Futures were likely to find support at $1,278.30 a troy ounce, the session low, and resistance at $1,314.70, last Wednesday's high.

Pro-Russian separatists claimed victory in a weekend referendum on self rule in the eastern Ukrainian city of Donetsk, which stirred concerns that the country is sliding closer to civil war.

The vote has been condemned by Ukraine's government and the West, which has threatened to hit Russia with fresh sanctions.

Elsewhere, a rebounding euro weakened demand for the dollar, which also supported gold, as the greenback and the yellow metal tend to trade inversely with one another.

Last week, the European Central Bank left interest rates unchanged at 0.25%, though the euro dropped after ECB President Mario Draghi said the bank's governing council would feel comfortable with acting at its next meeting in June.

By Monday, the single currency found support, which gave gold room to climb.

On Monday, ECB Vice President Vitor Constancio said medium-term inflation outlook will take high priority when monetary authorities consider implementing fresh policy measures.

He said the ECB was considering a wide range of policy options but stopped short of indicating what the bank may decide.

He stressed the ECB won't ignore the euro's strength but added that the exchange rate is not a policy target.

Elsewhere Monday, International Monetary Fund head Christine Lagarde renewed calls for more stimulus from the ECB, warning that persistently low inflation rates posed a serious threat to the European recovery.

Meanwhile, silver for July delivery was up 2.34% at $19.568 a troy ounce, while copper futures for July delivery were up 2.09% at $3.148 a pound.

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This article appears in: Investing , Forex and Currencies

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