Gold ends at 6-month high as Ukraine saga flares up

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Gold settled about 2 percent higher at a six-month peak on Wednesday, as fears of more corporate defaults in China and the geopolitical tug-of-war between Russia, Ukraine and the West hurt equity markets, boosting the metal's appeal as an insurance against risk.

"The increase in Asian physical gold demand over the past 10 years has been largely due to the huge rise in wealth in that region, so you would think anything that disrupts growth would negatively affect gold demand," Macquarie analyst Matthew Turner said.

"However, until we see that an element of Western safe-haven buying because of the knock-on effect it is having on equities and currencies seems to be the dominant driver."

U.S. gold futures for April delivery settled 1.8 percent higher at $1,370.50 an ounce, their loftiest close since September.

Spot gold was last up 1.3 percent at $1,367 an ounce.

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European equities tumbled on worries over global growth, while the dollar fell 0.1 against a basket of main currencies and yields on 10-year U.S. treasuries moved lower at around 2.7 percent.

China's first bond default and weak data on exports have stoked concerns about the health of the world's second-biggest economy, sending London copper prices to their lowest in 44 months. Copper is often put up as collateral for lending.

Tensions between Ukraine and Russia are also weighing on appetite for risk globally on a growing chance of western sanctions over Crimea.

The Group of Seven advanced economies will demand that Russia halt efforts to annex Ukraine's Crimea region in a statement to be issued later on Wednesday.

Bullion has gained 13 percent this year following a 28 percent drop in 2013, benefiting from worries about signs of soft economic growth in the United States and China.

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