Gold Holds Below $1,300 as U.S. Economy Weighed Against Ukraine

May 19, 2014 2:44 am ET

May 19 (Bloomberg) -- Gold held below $1,300 an ounce as investors assessed the health of the U.S. economy and the impact on monetary stimulus against tension in Ukraine.

Bullion for immediate delivery rose and fell at least 0.3 percent before trading at $1,295.99 an ounce at 2:43 p.m. in Singapore from $1,293.52 on May 16, according to Bloomberg generic pricing. Last week, the metal completed the first weekly gain in three as rebels fought government forces in Ukraine.

Gold tumbled 28 percent in 2013 to end a 12-year rally on expectations the Federal Reserve would cut asset purchases as the economy recovers. The Fed has announced reductions at each of its past four meetings. Data this week may show more Americans applied for jobless benefits after last week’s report showed unemployment claims fell to the lowest in seven years.

“U.S. economic data continues to come in mixed, which doesn’t provide much direction to the market,” said Zhu Runyu, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage. “As tensions persist in Ukraine and now rising in Vietnam, we expect some support for the market.”

Gold has advanced 7.9 percent this year in part as increasing tension in Ukraine fueled haven demand. In Vietnam, China is evacuating its citizens as Vietnamese authorities thwarted anti-China protests after violent demonstrations resulted in two deaths and damage at factories. The violence was spurred by anger over a Chinese oil rig in disputed waters.

Gold for June delivery advanced 0.2 percent to $1,296.30 an ounce on the Comex. Assets in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, were at 781.98 metric tons on May 16 after dropping to 780.46 tons on May 12, the lowest since January 2009.

Silver for immediate delivery rose 0.5 percent to $19.4751 an ounce. Platinum gained 0.3 percent to $1,469.63 an ounce, after climbing to $1,486 on May 14, the highest price since March 7. Palladium added 0.4 percent to $818.75 an ounce, after reaching $829.25 on May 14, the highest level since August 2011.

--With assistance from Phoebe Sedgman in Melbourne.