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Today has seen a fresh charge in the gold price as it has once again set new highs for the year. The panicked equity markets have helped funds seek more secure homes and the flight to security has pushed gold through $1360.
This weekend will see Crimea vote on where its future lies. Having seen the politicians already pledge their allegiance to Russia, it is quite possible the referendum will back this up. The markets are worried about how willing Ukraine and the west will be to let this happen without putting up a fight, either militarily or politically. Neither of these options is appealing and would result in further market concerns.
On top of the troubles in Crimea, the markets have seen disappointing monthly industrial production figures for the EU, showing a fall in the rate once again. It appears that the fragile recovery the EU is currently enjoying could quickly be tested.
Our outlook for gold remains to the upside, and a close above the $1361 level should see the precious metal look to test the $1395-1400 area.