Ukrainian worries bolster gold

Gold’s week long sabbatical below $1300 has definitively come to an end.

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.

Spot gold chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.