Aug. 7 (Bloomberg) -- Gold futures advanced to a two-week high as a decline in U.S. equities boosted demand for alternative investments.
The Standard & Poor’s 500 Index fell as much as 0.6 percent on concern that escalating tensions between Russia and Ukraine will hurt the global economy. More sanctions may be imposed if Russia doesn’t change course in Ukraine, White House officials said today.
Gold has climbed 9.2 percent this year as tensions in Eastern Europe and violence in the Middle East boosted demand for a haven. The European Central Bank kept interest rates unchanged at record lows as the Ukraine crisis strengthened the headwinds facing the euro area’s recovery.
“The weakness in equities because of uncertainty in Ukraine is pushing gold higher,” Tom Power, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Some money is flowing into gold from equities because of concerns about Europe.”
Gold futures for December delivery advanced 0.3 percent to settle at $1,312.50 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price reached $1,315.50, the highest for a most-active contract since July 22.
This year’s rally has topped gains for broad measures of stocks, Treasuries and commodities. Last month, holdings in global exchange-traded products backed by gold rose the most since November 2012.
Gold surged 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs at an all-time low. Last year, the metal tumbled 28 percent, the most in three decades, amid concern that the central bank would taper monetary stimulus as the economy gained traction and inflation remained muted.
Silver futures for September delivery fell 0.2 percent to $19.99 an ounce on the Comex, the fifth drop in six sessions.
On the New York Mercantile Exchange, platinum futures for October delivery rose 1.1 percent to $1,481.50 an ounce, the biggest gain in three weeks.
Palladium futures for September delivery climbed 0.8 percent to $856.05 an ounce.
--With assistance from Olga Tanas in Moscow.