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Gold is trading at $1328, as the developments in Ukraine have encouraged traders to move their cash out of stocks and into the yellow metal. We are beginning to see a repeat of the Crimea crisis, with conflicts between Ukrainian forces and pro-Russian radicals in the East of Ukraine. Even though we are nowhere near an all-out war, the possibility of any exchange of fire will prompt traders to fly to quality.
As Alastair McCaig stated, the increase in political tension drove gold above the $1300 mark last week. The situation has deteriorated since then and that is why we are approaching the $1330 mark.
Tomorrow, Janet Yellen of the Federal Reserve will make a statement at 1.45pm (London time). If Ms Yellen reiterates her mildly dovish sentiment, we could see gold head towards $1334 mark.