Gold Futures Rise to Six-Month High on Ukraine Tensions

Gold futures climbed to a six-month high as mounting tensions between Russia and Ukraine boosted the metal’s appeal as a haven asset.

The U.S. and the European Union are threatening sanctions if Russia doesn’t back down from annexing the Black Sea province of Crimea, which is holding a referendum in two days to join Ukraine’s former Soviet-era master.

Gold has gained 14 percent this year amid the standoff over Crimea and signs of slowing global economic growth. A gauge of world equities fell for the sixth session, the longest slump since November 2012.

“We’re seeing investors shift out of riskier assets like the stock market and into the safety of gold,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview.

Gold futures for April delivery rose 0.5 percent to settle at $1,379 an ounce at 1:39 p.m. on the Comex in New York. Earlier, the price reached $1.388.40, the highest since Sept. 10. Trading was 40 percent higher than the average in the past 100 days, according to data compiled by Bloomberg.

This week, the metal gained 3 percent, the most in a month. Russia warned that Ukraine’s government has lost control of the country, fueling concern that the Kremlin may extend a military intervention. Six hours of talks between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov failed to ease the conflict.

Faltering China

The MSCI All-Country World Index of equities has dropped 2.3 percent this week on concern that China’s economy is faltering.

Yesterday, holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, increased 0.3 percent to 813.3 metric tons, the highest since Dec. 20. The Philadelphia Stock Exchange Gold & Silver Index of 30 companies has gained 25 percent this year.

In 2013, gold slumped 28 percent, the most since 1981, amid a U.S. equity rally to a record, muted inflation and speculation that the Federal Reserve would taper monetary stimulus.

Silver futures for May delivery rose 1 percent to $21.413 an ounce on the Comex.

On the New York Mercantile Exchange, platinum futures for April delivery slipped 0.7 percent to $1,469.60 an ounce. Palladium futures for June delivery declined 0.7 percent to $773.25 an ounce.

To contact the reporter on this story: Luzi Ann Javier in New York at ljavier@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Patrick McKiernan, Joe Richter

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