Increased tensions in Ukraine, where pro-Russian dissidents have taken over a number of important buildings in Donetsk, have helped squeeze gold above $1300. Speculation is rife that these troubles are being allegedly orchestrated from within Russia. The fact that tensions are now within mainland Ukraine has seen jitters in equities, and the consequences of an escalation would be counterproductive for most of Europe.
In my article on Friday, I stated that the fundamental picture for gold had improved because of an increased demand from both India and Japan.
As stated by David Madden yesterday, these worries have now driven gold high enough that traders will be assessing its ability to continue higher and tackle the $1322 target. Unless gold closes below $1300 or there is an immediate change in Ukraine, we would recommend maintaining our current stance.