GO
Loading...

Gold ends higher on Ukraine tensions; physical demand weak

Getty Images

Gold ended Monday's trading session about 1 percent higher as heightened tensions in Ukraine spurred some safe-haven buying, but a lack of strong physical demand could weigh on prices, analysts said.

Bullion briefly rose above $1,300 an ounce after pro-Moscow rebel leaders in eastern Ukraine called for their region to become part of Russia after declaring victory in a weekend referendum on self-rule, a move that could drag the country into war.

However, gold's failure to hold above key support of $1,300 an ounce and gains in U.S. equities, with the S&P 500 index moving within 1 percent of its record high, cut the metal's gains.

Symbol
Name
Price
 
Change
%Change
Volume
GOLD
---
GOLD/USD
---
SILV/USD
---
SILVER
---
PALL/USD
---
PLAT/USD
---

"The floor looks to be softening for gold, with physical demand not making up for soft investor demand,'' said Christopher Louney, precious metals analyst at Barclays Capital. "We still think that gold will move lower.''

U.S. gold futures for June delivery settled $8.20, or 0.6 percent, higher at $1,295.80 an ounce, having earlier hit a high of $1,304.50.

Spot gold, meanwhile, rose 0.5 percent to $1,296 an ounce.


Subdued buying in the physical markets hurt sentiment towards gold.

In top buyer China, local premiums over the global benchmark rose slightly, but they are still much lower than the over-$20 premiums seen earlier in the year.

China's weakening demand for physical metals was reflected by a 44 percent year-over-year fall in the demand of gold bars in the first quarter, according to data by the China Gold Association.

For more information on precious metals, please click here.

Contact Commodities

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More