Gold was little changed in New York trading below a three-week high as investors weighed signs tension in Ukraine and the Middle East is easing.
Global equities rose for a second day after Russia said warplanes ended drills near Ukraine and Israel and militants in the Gaza Strip agreed to an Egyptian-brokered truce. Geopolitical unrest helped gold gain 9 percent this year, with prices reaching a three-week high of $1,324.30 an ounce on Aug. 8 as U.S. President Barack Obama authorized air strikes in Iraq.
The dollar touched an almost six-month high against 10 major currencies on Aug. 6 on demand for a haven and the outlook for a strengthening U.S. economy. The Federal Reserve is cutting stimulus that helped gold reach a record in 2011. Futures traders are pricing in a 69 percent chance of an increase in the Fed’s benchmark rate to at least 0.5 percent by September 2015.
“Any signs that the crises could be de-escalating would threaten the recent rally in gold and render the metal vulnerable to a slide,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. Data “continued to suggest that the U.S. economy is recovering. If the dollar continues strengthening, the upward thrust in gold is likely to be curtailed.”
Gold for December delivery was little changed at $1,310.60 an ounce by 7:49 a.m. on the Comex in New York. Bullion for immediate delivery dropped 6 cents to $1,309.52 in London, according to Bloomberg generic pricing.
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