Gold gains on bargain hunting, Ukraine concerns

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Investing.com - Gold prices rose on Tuesday on demand from bottom fishers who viewed the commodity as oversold, while concerns the Russia-Ukraine conflict will escalate sent investors seeking safe harbor in the yellow metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,292.20 a troy ounce during U.S. trading, up 0.26%, up from a session low of $1,283.60 and off a high of $1,294.90.

The December contract settled down 0.46% at $1,288.90 on Monday.


Futures were likely to find support at $1,281.00 a troy ounce, last Friday's low, and resistance at $1,314.60, the high from July 29.

Gold prices reached levels ripe for bottom fishing earlier as investors priced in otherwise bearish data for the commodity.

The Institute of Supply Management reported earlier that its services purchasing managers' index jumped to 58.7 in July from 56.0 in June.

Economists had expected the index to tick up to 56.3, and the better-than-expected figure sparked demand for the dollar as investors adjusted their timetables as to when the Federal Reserve may hike interest rates, with many betting tightening may come sooner than once thought.

Tighter policy tends to be bearish for gold by eroding is appeal as a hedge to a weaker dollar, though geopolitical concerns sent investors seeking safe harbor in the precious metal, especially due to sentiments the asset was oversold.

Reports surfaced earlier that Russia was amassing more troops near its border with Ukraine, which rattled markets worldwide by stoking concerns an escalating conflict could dampen global recovery.

Since the West slapped sanctions on Moscow several days ago for allegedly meddling in Ukraine's affairs by supporting separatists, Russian troops along the border have reportedly jumped to 20,000 from 8,000.

Meanwhile, silver for September delivery was down 1.73% at $19.883 a troy ounce, while copper futures for September delivery were down 1.29% at $3.202 a pound.

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This article appears in: Investing , Forex and Currencies

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