Gold Continues To Fall After Ukraine Turmoil Cools

Gold traded near a 16-week low and headed for a monthly loss as signs of an improving U.S. economy and easing of tension in Ukraine curbed demand for a haven. Palladium was set for a fourth monthly advance.

Bullion is set for a 3.3 percent monthly drop after data showed this week U.S. durable goods orders unexpectedly rose in April and global equities reached the highest since 2007. Gold’s drop sent the metal’s 14-day relative-strength index to near the level of 30 that suggests a potential impending rebound to some analysts who study technical charts.

Russia has pulled back most of its troops from the border with Ukraine, according to a U.S. defense official, as government forces continued a campaign to wipe out separatist rebels in the former Soviet Republic’s east. A recent surge in fighting produced a new round of finger-pointing between the U.S. and Russia, the top supplier of palladium. That metal climbed to the highest since August 2011 this week as a mine strike in South Africa continued.

“Risk appetite has been improving,” said Sarah Xie, an analyst at Hong Kong-based Wing Fung Financial Group Ltd. “Investors are transferring their capital from gold to the stock market. Turmoil in Ukraine has eased.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza