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Gold, silver turn higher as Ukraine tension boosts safety demand

Published 02/27/2014, 05:29 AM
Gold, silver prices erase losses as Ukraine tension boosts safety demand
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Investing.com - Gold and silver prices turned higher on Thursday, as rising geopolitical tensions in Ukraine fuelled risk aversion and supported safe haven demand.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded in a range between $1,324.20 a troy ounce and $1,332.80 an ounce.

Gold prices last traded at $1,332.30 an ounce during European morning hours, up 0.3%.

Gold futures rose to $1,345.60 an ounce on Wednesday, the most since October 30, before turning lower to settle at $1,328.00 an ounce, down 1.09%, or $14.70.

Prices were likely to find support at $1,307.10 a troy ounce, the low from February 20 and resistance at $1,345.60, the high from February 26.

Meanwhile, silver for May delivery rose 0.6% to trade at $21.41 a troy ounce. Prices fell to $21.02 an ounce earlier, the lowest since February 14. The May contract plunged 3.24% on Wednesday to settle at $21.28 an ounce.

Safe-haven demand was boosted after reports that Russian President Vladimir Putin ordered 150,000 Russian troops to begin military exercises in central and western Russia, near the border with Ukraine.

The move prompted the United States to warn Russia that it would be a "grave mistake" to intervene militarily.

Tensions in Ukraine have been rising ever since the country’s pro-Kremlin President Viktor Yanukovych was ousted last week, reportedly fleeing to Russia.

Meanwhile, investors awaited Federal Reserve Chair Janet Yellen's Senate testimony later in the day. Ms. Yellen was expected to reiterate that the U.S. central bank would continue to roll back its asset purchase program, as long as the economy improves as expected.

The U.S. was also due to release data on durable goods orders, a leading indicator of production, and the weekly report on initial jobless claims later in the session.

A recent series of disappointing U.S. economic indicators have sparked concerns that the recovery has lost momentum since the end of last year as inclement winter weather weighed on growth.

Gold and silver prices have been well-supported in recent weeks amid expectations that U.S. monetary policy will remain accommodative.

Gold has gained nearly 7.5% since the beginning of the year, while silver has picked up approximately 6%.

Elsewhere on the Comex, copper futures for May delivery declined 0.3% to trade at a three-week low of $3.206 a pound.

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