Gold futures rose to a 24-week high as escalating tension between Russia and Ukraine over control of Crimea spurred demand for the precious metal as a haven.
Ukraine warned Russia is amassing troops near its border in the gravest crisis between Russia and the West since the Cold War. Germany told Russia yesterday it must switch course in Crimea by next week or risk more sanctions, while Ukraine’s deposed Russian-backed president warned of a possible civil war. A gauge of global equities headed for the longest slump in three months, and gold climbed for the third straight day.
“People are being more risk averse and moving to safe-haven assets,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Gold will continue to move higher if the sanctions are imposed.”
Gold futures for April delivery gained 1.8 percent to settle at $1,370.50 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price reached $1,371.30, the highest for a most-active contract since Sept. 19. Trading was 84 percent above the average for the past 100 days, data compiled by Bloomberg showed.
The metal has climbed 14 percent this year, partly amid concern that economies in the U.S. and China are faltering, and the Philadelphia Stock Exchange Gold & Silver Index of 30 companies has gained 22 percent.
Last year, gold tumbled 28 percent, the most since 1981, amid a U.S. equity rally to a record and muted inflation.
Gold surged 70 percent from December 2008 to June 2011 as the Federal Reserve pumped more than $2 trillion into the financial system and lowered interest rates to a record to boost the economy.
The Fed announced a $10 billion reduction in bond buying at each of its past two meetings, leaving monthly purchases at $65 billion.The next meeting is scheduled for March 18-19.
Goldman Sachs Group Inc. says this year’s rally will fizzle, and the chances have increased that gold will slump to $1,000 for the first time since 2009.
Silver futures for May delivery rose 2.6 percent to $21.358 an ounce on the Comex, the biggest jump since Feb. 14.
On the New York Mercantile Exchange, platinum futures for April delivery advanced 0.8 percent to $1,476.30 an ounce. Palladium futures for June delivery climbed 0.9 percent to $771.15 an ounce.
The European Union announced a three-stage sanctions process against Russia, the world’s biggest source of palladium.
The MSCI All-Country World Index headed for the fourth straight decline, the longest slump since Dec. 13.