Gold traded above a five-week low in New York as investors weighed the crisis over Ukraine against the outlook for higher U.S. interest rates.
Bullion futures dropped 3.1 percent last week as U.S. Federal Reserve Chair Janet Yellen said the central bank’s debt-buying program may end this year. Fed Bank of Atlanta President Dennis Lockhart said yesterday he expects interest rate increases in the second half of next year.
Gold reached a six-month high on March 17 as a standoff between Russia and the West escalated. U.S. President Barack Obama warned Russian President Vladimir Putin yesterday that Russia would face more sanctions if it moved further into eastern Ukraine after its annexation of Crimea.
“The comments we’ve seen from Yellen has maybe got a bit of market jitters going and prompted some profit-taking,” James Moore, an analyst at FastMarkets Ltd. in London, said today by phone. “There’s still buying interest for gold. Ukraine created some safe-haven demand and has got the potential to increase in the coming sessions.”
Gold for June delivery added 0.2 percent to $1,314.40 an ounce by 7:50 a.m. on the Comex in New York. It reached $1,305.90 yesterday, the lowest since Feb. 14. Futures volume was 6 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Bullion for immediate delivery rose 0.2 percent to $1,314.25 in London.