Tags: gold | plane | crash | Obama

Gold Rallies on Safe-Haven Bids After Malaysian Plane Downed

Thursday, 17 July 2014 02:15 PM

Gold surged 1.3 percent on Thursday as investors sought shelter in the precious metal on fears of further turmoil after news that a Malaysian passenger jetliner had been downed in Ukraine.

Earlier, safe-haven bids had already boosted bullion prices on new U.S. and European Union sanctions on Russia, fresh on the heels of news that a Ukrainian fighter plane had been shot down over eastern Ukraine.

Gold rallied $20 in about 40 minutes and the S&P 500 equities index extended losses after news of the Malaysian passenger jet crash. Gold investors scrambled to establish new long positions and bought back bearish bets on the news, traders said.

"When the news came out, it was frantic buying and short-covering in the market, a combination of buy-stops being triggered and traders repositioning as fast as possible," said Phillip Streible, senior commodities broker at RJ O'Brien in Chicago. "People are a little cautious now as they are not going to have as much exposure to riskier assets like the S&P 500, and that should help gold."

Spot gold was up 1.3 percent at $1,315.91 an ounce at 1:48 p.m. EDT. U.S. gold futures for August delivery settled up $17.10 an ounce at $1,316.90.

Turnover was much heavier than usual with volume about 20 percent above its 30-day average, preliminary Reuters data showed.

Before the Malaysian jetliner news, precious metal prices were higher on U.S. President Barack Obama's move to impose sanctions on some of Russia's biggest companies for the first time over Moscow's failure to curb violence in Ukraine. The sanctions, the toughest yet imposed by the United States, also helped send palladium to 13-1/2 year highs. The metal is chiefly sourced from Russia. Palladium benefits as the new U.S. sanctions fueled further buying from investors already expecting supply to struggle to keep pace with demand this year. Spot palladium peaked at $887.90 an ounce and was last up 1.3 percent at $882.42. It is the best performing of the main precious metals this year, up 24 percent so far.

Spot platinum was up 1.3 percent at $1,497.60 an ounce, while spot silver rose 2 percent to $21.08 an ounce.

© 2019 Thomson/Reuters. All rights reserved.

   
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Gold surged 1.3 percent on Thursday as investors sought shelter in the precious metal on fears of further turmoil after news that a Malaysian passenger jetliner had been downed in Ukraine.
gold, plane, crash, Obama
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2014-15-17
Thursday, 17 July 2014 02:15 PM
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