Gold fell to a two-week low in New York as investors assessed whether the election of Ukraine’s president will ease tension with Russia, reducing the metal’s appeal as a haven.
Ukraine’s President-elect Petro Poroshenko vowed to step up operations to rein in separatists in the east of the country as fighting continued after the weekend election. His victory has relieved the immediate pressure on the U.S. and the European Union to impose tougher sanctions against Russia. Gold rose 6.7 percent this year, partly as the tensions spurred haven demand.
Prices slid 28 percent last year on expectations the U.S. Federal Reserve would ease stimulus. Minutes released this month of the central bank’s April meeting showed policy makers said that continued stimulus to push unemployment lower doesn’t risk sparking an undesirable jump in inflation. The dollar rose as much as 2.7 percent versus the euro since May 8. Gold priced in dollars becomes more expensive for holders of other currencies when the greenback strengthens.
“There’s no panic” over Ukraine, Bernard Sin, the head of currency and metal trading at MKS (Switzerland) SA, a Geneva-based refiner, said today by phone. “The strengthening dollar” has also curbed demand, he said.
Gold for August delivery fell 0.7 percent to $1,282.80 an ounce by 7:33 a.m. on the Comex in New York. It reached $1,282, the lowest since May 12. U.S. markets were closed yesterday for the Memorial Day holiday and transactions will be booked today for settlement purposes.
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