Gold rebounded from the lowest price in more than four weeks as the world’s leading industrial powers threatened more sanctions to deter Russia from further incursions into Ukraine, boosting demand for a haven.
Meeting for the first time since last week’s annexation of Crimea by Russia, Group of Seven leaders said they won’t attend a G-8 meeting that had been set for Sochi, on Russia’s Black Sea coast, and will instead hold their own summit in June in Brussels. Gold rose 9 percent this year on signs of a faltering global economy and the most serious confrontation between Moscow and the U.S. and its allies since the demise of the Soviet Union. Iraq said it bought 36 tons of gold this month.
“I can’t see any other direction for gold other than going higher because this situation isn’t going to resolve itself anytime soon,” said Gavin Wendt, the founder and senior resource analyst at Mine Life Pty in Sydney. “It’s not going to get resolved and it could spread to other parts of Ukraine.”
Bullion for immediate delivery advanced as much as 0.7 percent to $1,317.48 an ounce and was at $1,314.87 at 9:40 a.m. in London. Prices dropped to $1,308.06 yesterday, the lowest since Feb. 20, on expectations that interest rates are set to increase as the U.S. recovers. Gold for June delivery rose 0.4 percent to $1,316 an ounce on the Comex in New York, where trading volumes were 49 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Holdings in the SPDR Gold Trust, the world’s biggest bullion-backed exchange-traded product, increased 0.6 percent to 821.47 metric tons yesterday, the highest since Dec. 13, according to data from the fund’s website.