July 28 (Bloomberg) -- Gold futures rose for a second straight session as fighting between Ukrainian forces and rebels increases demand for the precious metal as an alternative investment.
The U.S. will impose more sanctions on Russia after the European Union decides on its actions, President Barack Obama’s deputy national security adviser said today. International pressure mounted on Israel to end its three-week offensive in the Hamas-controlled Gaza Strip. Tension in the Middle East and Ukraine helped boost gold 8.6 percent this year.
“All that news about violence and talks about further sanctions are keeping gold supported,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “The weakness in the stock market is also helping gold.”
On the Comex, gold futures for December delivery added less than 0.1 percent to settle at $1,305.80 an ounce at 1:30 p.m. in New York. On July 25, prices rose 1 percent.
“Gold is clearly in greater demand again as a safe haven” amid turbulence in Ukraine and the Middle East, analysts at Commerzbank AG wrote in a report today. “The latest price rises were doubtless attributable above all to short-term” traders, they said.
Central banks from Russia to Kazakhstan to Mexico increased gold reserves in June as Germany trimmed its holdings, International Monetary Fund data show.
Bullion fell 28 percent last year on expectations for reduced U.S. monetary stimulus. Federal Reserve policy makers start a two-day meeting tomorrow to debate the pace of interest- rate increases and whether to reduce further bond purchases.
U.S. data this week may show that economic growth rebounded last quarter and that employers added more than 200,000 jobs for a sixth straight month in July.
Silver futures for September delivery fell 0.3 percent to $20.567 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for October delivery gained 0.8 percent to $1,490.60 an ounce. Palladium futures for September delivery climbed 0.1 percent to $880.75 an ounce. The metal reached a 13-year high of $890 on July 17 as a five-month strike by miners cut output in South Africa, the world’s biggest producer after Russia.
--With assistance from Glenys Sim in Singapore.