Yellow metal prices were seen trading higher on Thursday, trading to its highest level in nearly six months as the worsening tension between Russia and Ukraine increased haven demand.
Gold futures climbed 0.06% higher to $1,371.40 an ounce at the time of writing, while silver futures edged 0.11% lower to $21.335 an ounce.
Gold has climbed by 14% this year, picking up from the decline of 28% seen last year as the demand for a store of value boosted by the ongoing crises in Ukraine and the growth in China continues to slow down.
Meanwhile, the US dollar index dropped 0.23% lower to 79.421. Holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust; came in at 811.20 tons on Wednesday, marking the first fall since Feb 19.
Gold – Ukraine Tension
The ongoing tension between Russia and Ukraine over the Crimean region continues as the Prime Minister of Ukraine Arseniy Yatsenyuk met with US President Barack Obama to discuss protecting Ukraine’s sovereignty and territory.
Ukraine’s Crimea n region is preparing for a referendum on March 16 on joining Russia, while Ukraine and the western nations discussed sanctions on Russia and further repercussions if Russia failed to ease tensions.
Gold – China
Gold traders are also focusing on the world’s biggest gold consumer, China, as reports recently released added concerns over the slowdown of the nation’s economy.
According to the reports released, China’s industrial production grew at a slower pace the period between January – February. Expanding by 8.6% year-on-year, compared to the 9.7% increase seen in the previous month and lower than analysts forecast of a 9.5% rise.
While retail sales edged 11.8% higher on an annual basis, dropping from the 13.1% rise seen in the previous month and compared to forecasts of a 13.5% growth.
Earlier in the week, China reported an unexpected fall in exports, which fell by 18.1% year-on-year in February and a deficit of $23 billion.
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