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Gold ends around $1,328; Ukraine tension saps risk appetite

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Gold settled around a three-week high on Monday as mounting tensions in Ukraine curbed investor appetite for risk, boosting bullion's appeal as an insurance asset, while palladium prices rallied to a 2-1/2 year peak.

The autocatalyst metal hit its highest since August 2011 at $815.70 an ounce on growing fears that supply would suffer from fresh U.S. sanctions on top producer Russia, as well as prolonged labour strikes in No. 2 miner South Africa.

Pro-Russian separatists on Monday ignored an ultimatum to leave occupied government buildings in eastern Ukraine while another group of rebels attacked a police headquarters as a threatened military offensive by government forces failed to materialize.

Gold futures for June delivery settled $8.50 higher at $1,327.50 an ounce.

Meanwhile, spot gold was last up 0.7 percent at $1,327 an ounce, having earlier touched its highest since March 24 at $1,329.70. Gold futures for June delivery settled $8.50 higher at $1,327.50 an ounce.

Symbol
Name
Price
 
Change
%Change
Volume
GOLD
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GOLD/USD
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SILV/USD
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SILVER
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PALL/USD
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PLAT/USD
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``The gains are a result of uncertainty over the situation in Ukraine, and warnings by NATO that Russia may invade Ukraine. That's now having an impact on the gold market,'' Peter Fertig, a consultant at Quantitative Commodity Research, said.

``There is a general risk in this conflict that things might get hotter,'' he said.

Relations between Russia and the West are at their worst since the Cold War, after Moscow annexed Crimea from Ukraine, saying the Russian population there was under threat.

The United States is prepared to step up sanctions against Moscow if pro-Russian military actions in eastern Ukraine continue, a senior U.S. envoy said, with the sanctions set to target, mining, banking and energy among others.

—By Reuters

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