Gold prices up smartly in Asia as Crimea vote supports joining Russia

Investing.com - Gold prices were up smartly in early Asian trade on Monday as an annexation of the Crimean region looked inevitable after a vote on Sunday, prompting President Barack Obama to warn Russia President Vladimir Putin again that the United States and Europe are "prepared to impose additional costs" on Russia for its actions.

The U.S. and Europe have said they would impose economic and diplomatic sanctions on Russia next week, if the vote took place. On Sunday reports said an overwhelming majority supported the referendum to joing Russia and leave the Ukraine with celebrations underway. Official results are due within the day.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at $1,388.80 a troy ounce, up 0.71%, after settling at $1,379.00 a troy ounce last week.

Comex gold prices ended the week with a gain of 2.95%, or $40.80, amid heightened tensions between Russia and the U.S. over Russia's involvement in Ukraine's political crisis.

Meanwhile, weaker than expected U.S. consumer confidence data further boosted the appeal of the precious metal.

The University of Michigan consumer sentiment index ticked down to 79.9, from the 81.6 final reading in February. Analysts had expected the index to improve to 82.0.

In the week ahead, investors will be looking ahead to Wednesday’s monetary policy announcement by the Federal Reserve amid speculation the central bank is likely to continue to scale back its stimulus program.

The Fed is also to publish its economic forecasts and Fed Chair Janet Yellen will hold a press conference.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending March 11.

Net longs totaled 123,007 contracts, up 3.87% from net longs of 118,241 in the preceding week.

Elsewhere on the Comex, silver for May delivery traded at $21.587 a troy ounce, up 0.81% and copper for May delivery rose 0.29% 2.949 a pound. The industrial metal fell to $2.908 a pound on March 12, the lowest since July 2010.

Fears over problems in China’s financial sector also sapped risk appetite following the country’s first domestic bond default this month.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.