Gold rose the most in more than two weeks as tensions flared on the border between Ukraine and Russia, increasing demand for the precious metal as a haven.
Russian President Vladimir Putin began talks today with his Ukrainian counterpart, Petro Poroshenko. Ukraine said that 12 servicemen and 200 rebels died in the past 24 hours.
This year, gold has gained 6.9 percent on turbulence in the Gaza region, Iraq and Eastern Europe coupled with signs of slowing global economic growth. The conflict between Ukraine’s government and pro-Russian separatists has left more than 2,000 dead since Putin annexed Crimea in March.
“Gold is getting a bid today because of the escalation in violence in Ukraine,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Some people are worried that this crisis will not end soon.”
Gold futures for December delivery rose 0.5 percent to settle at $1,285.20 an ounce at 1:40 p.m. on the Comex in New York, the biggest gain for a most-active contract since Aug. 6. Trading was 21 percent below the average for the past 100 days for this time, data compiled by Bloomberg show.
Bullion slid to a two-month low of $1,273.40 on Aug. 21, on concern that the Federal Reserve may raise interest rates sooner than expected. Fed Chair Janet Yellen said in an address at Jackson Hole, Wyoming, the following day that if progress in labor markets “continues to be more rapid than anticipated,” an interest-rate increase could come sooner than currently expected, and further increases could be more rapid.
Last year, gold slumped the most in more than three decades on concern that the U.S. central bank would slow the pace of monetary stimulus.
Russia and Kazakhstan increased gold holdings in July, while Belarus, Ecuador and Mexico were among nations that reduced them, data on the International Monetary Fund’s website show.
Silver futures for December delivery gained 0.1 percent to $19.459 an ounce on the Comex, the first advance in four sessions.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.1 percent to $1,419.60 an ounce, halting a nine-session decline. Earlier, the price dropped to $1,413.50, the lowest since May 1. Palladium futures for December delivery fell 0.2 percent to $890.15 an ounce.