Comex Gold Posts Highest Pit Close In Four Months On Safe-Haven Demand
By Allen Sykora of Kitco News
Monday March 3, 2014 2:01 PM
(Kitco News) - Heightened geopolitical tensions surrounding Ukraine, combined with technically oriented buying, pushed gold futures to their highest close since late October on Monday.
Much of the buying was described as a flight to safety, particularly as the equity market tumbled, with short covering adding more fuel to gold’s move.
“Obviously, with all of the turmoil in Crimea, gold has basically reasserted its role as a safe-haven play,” said Jim Comiskey, senior account executive with Archer Financial Services.
Russian troops reportedly entered Crimea after the previous pro-Russian government of Ukraine fell. CNN quoted Ukraine’s defense ministry as saying that the Russian commander of the Black Sea Fleet went aboard a blocked Ukrainian warship in Crimea’s Sevastopol Harbor and issued a threat to surrender or else face an attack. Russia’s parliament is also reportedly considering the annexation of Crimea. Western nations have condemned Russia’s actions.
After the pit settlement, gold for April delivery settled with a gain of $28.70 to $1,350.30 an ounce on the Comex division of the New York Mercantile Exchange. May silver closed up 24.4 cents to $21.485.
The afternoon gold fixing in London was $1,349.50 an ounce, the highest of 2014.
The Ukraine news roiled a wide range of markets. As the Comex gold pit was closing, the Dow Jones Industrial Average was down by more than 180 points. Other traditional safe havens such as Treasury bonds and the U.S. dollar rose with gold.
“You’ve got a risk-off mentality taking place that is dropping stocks, and that has moved traders back into the safe haven of gold temporarily on fear that the situation in the Ukraine could turn into a shooting situation,” said Ira Epstein, director of the Ira Epstein division of The Linn Group.
Several traders said buy stops were triggered on gold’s ascent above last week’s highs. Also, some market participants were said to be short covering, which is buying to offset positions in which they had previously gone short, or sold, on expectations for weaker prices.
“There were a lot of shorts in the gold market,” Comiskey said. “They’ve pretty much thrown in the towel now.”
Comiskey said he considered gold’s sharp rise since Friday especially “impressive” since the U.S. dollar also rallied. Often, a stronger greenback pressures gold due to their frequent inverse relationship.
http://www.kitco.com/news/2014-03-0...lose-In-Four-Months-On-Safe-Haven-Demand.html
By Allen Sykora of Kitco News
Monday March 3, 2014 2:01 PM
(Kitco News) - Heightened geopolitical tensions surrounding Ukraine, combined with technically oriented buying, pushed gold futures to their highest close since late October on Monday.
Much of the buying was described as a flight to safety, particularly as the equity market tumbled, with short covering adding more fuel to gold’s move.
“Obviously, with all of the turmoil in Crimea, gold has basically reasserted its role as a safe-haven play,” said Jim Comiskey, senior account executive with Archer Financial Services.
Russian troops reportedly entered Crimea after the previous pro-Russian government of Ukraine fell. CNN quoted Ukraine’s defense ministry as saying that the Russian commander of the Black Sea Fleet went aboard a blocked Ukrainian warship in Crimea’s Sevastopol Harbor and issued a threat to surrender or else face an attack. Russia’s parliament is also reportedly considering the annexation of Crimea. Western nations have condemned Russia’s actions.
After the pit settlement, gold for April delivery settled with a gain of $28.70 to $1,350.30 an ounce on the Comex division of the New York Mercantile Exchange. May silver closed up 24.4 cents to $21.485.
The afternoon gold fixing in London was $1,349.50 an ounce, the highest of 2014.
The Ukraine news roiled a wide range of markets. As the Comex gold pit was closing, the Dow Jones Industrial Average was down by more than 180 points. Other traditional safe havens such as Treasury bonds and the U.S. dollar rose with gold.
“You’ve got a risk-off mentality taking place that is dropping stocks, and that has moved traders back into the safe haven of gold temporarily on fear that the situation in the Ukraine could turn into a shooting situation,” said Ira Epstein, director of the Ira Epstein division of The Linn Group.
Several traders said buy stops were triggered on gold’s ascent above last week’s highs. Also, some market participants were said to be short covering, which is buying to offset positions in which they had previously gone short, or sold, on expectations for weaker prices.
“There were a lot of shorts in the gold market,” Comiskey said. “They’ve pretty much thrown in the towel now.”
Comiskey said he considered gold’s sharp rise since Friday especially “impressive” since the U.S. dollar also rallied. Often, a stronger greenback pressures gold due to their frequent inverse relationship.
http://www.kitco.com/news/2014-03-0...lose-In-Four-Months-On-Safe-Haven-Demand.html
