Gold rises on Ukraine unease, though U.S. data cap gains

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Investing.com - Gold prices rose on Wednesday on safe-haven demand amid concerns the Russia-Ukraine conflict is set to escalate, though a positive jobless claims report in the U.S. capped gains.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,312.40 a troy ounce during U.S. trading, up 0.32%, up from a session low of $1,303.40 and off a high of $1,314.80.

The December contract settled up 1.78% at $1,308.20 on Wednesday.


Futures were likely to find support at $1,283.30 a troy ounce, Tuesday's low, and resistance at $1,320.40, the high from July 21.

Investors flocked to gold on Wednesday on fears the conflict in Ukraine is set to escalate.

Reports that Russia has amassed more troops near its border with Ukraine have bolstered gold prices due to the safe-haven appeal the yellow metal enjoys during times of geopolitical uncertainty.

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

Still, upbeat jobless claims data in the U.S. capped the precious metal's advance.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Aug. 2 fell by 14,000 to 289,000 from the previous week's total of 303,000.

Analysts had expected jobless claims to rise by 2,000 to 305,000 last week, and the numbers confirmed market expectations for the Federal Reserve to close its monthly bond-buying stimulus program in October and begin hiking interest rates afterwards in 2015.

Loose monetary policies such as Fed asset purchases bolster gold by suppressing long-term interest rates, which weakens the dollar, gold's traditional hedge.

Talk of tighter policy tends to weaken gold by giving the dollar support.

Meanwhile, silver for September delivery was down 0.33% at $19.958 a troy ounce, while copper futures for September delivery were up 0.21% at $3.173 a pound.

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This article appears in: Investing , Forex and Currencies

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