May 2 (Bloomberg) -- Gold advanced the most since mid-March as tensions between Russia and Ukraine increased, boosting demand for the precious metal as a haven.
Ukraine sent armored vehicles and artillery to retake Slovyansk, a stronghold for pro-separatist forces, defying President Vladimir Putin’s demand to pull back troops with Russia’s army massed across the border. Gold earlier fell as much as 0.7 percent after a government report showed U.S. employers boosted payrolls in April by the most in two years.
This year, bullion has climbed 8.4 percent amid signs of faltering U.S. economic growth and mounting political crisis in Eastern Europe.
“Despite the upbeat jobs outlook and improving U.S. economic outlook, traders still remain focused on the larger geopolitical risks as things in Ukraine are starting to take another downturn ahead of a long weekend,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “It’s the kind of news that gets people worried and they start seeking safety in gold.”
Gold futures for June delivery rose 1.5 percent to settle at $1,302.90 an ounce at 1:43 p.m. on the Comex in New York, the biggest gain for a most-active contract since March 12.
The metal also rebounded after the Standard & Poor’s 500 Index of equities erased gains, renewing demand for alternative assets.
Last month’s 288,000 increase in U.S. employment was the biggest since January 2012, Labor Department figures showed today. The jobless rate plunged to 6.3 percent, the lowest since September 2008.
“The jobs data was better-than-expected, so that could push gold down,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The economic data over the past few days has been mixed, but prices could grind lower.”
Prices fell 1.3 percent in the previous four days. The Federal Reserve reduced monthly asset buying to $45 billion on April 30 with the fourth straight $10 billion cut, and policy makers said further reductions in “measured steps” are likely.
Gold jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut interest rates to a record in a bid to boost the economy.
Silver futures for July delivery rose 2.6 percent to $19.546 an ounce, the biggest gain since Feb. 14. Yesterday, the metal touched $18.685, the lowest for a most-active contract since July 8.
On the New York Mercantile Exchange, palladium futures for June delivery fell 0.2 percent to $812.40 an ounce, the first drop in four days.
Platinum futures for July delivery rose 0.9 percent to $1,440.70 an ounce, extending the week’s gain to 1.2 percent.
To contact the editors responsible for this story: Millie Munshi at email@example.com Patrick McKiernan