Heightened geopolitical tensions surrounding Ukraine lifts prices
Bullion metals ended substantially higher at Comex on Monday, 03 March 2014. Heightened geopolitical tensions surrounding Ukraine, combined with technically oriented buying, pushed gold futures to their highest close since late October on Monday. Much of the buying was described as a flight to safety, particularly as the equity market tumbled, with short covering adding more fuel to gold's move. Gold futures surged by more than 2% on Monday.
Gold for April delivery jumped $28.70, or 2.2%, to settle at $1,350.30 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, prices had climbed to as high as $1,355.
May silver rose 24 cents, or 1.2%, to end at $21.485 an ounce, off the session's high of $21.74.
Russian troops reportedly entered Crimea after the previous pro-Russian government of Ukraine fell. Russia's parliament is also reportedly considering the annexation of Crimea. Western nations have condemned Russia's actions. The Ukraine news roiled a wide range of markets. As the Comex gold pit was closing, the Dow Jones Industrial Average was down by more than 180 points. Other traditional safe havens such as Treasury bonds and the U.S. dollar rose with gold.
Economic data at Wall Street included three reports on Monday. Construction spending increased 0.1% in January after increasing an upwardly revised 1.4% (from 0.1%) in December. The consensus expected construction spending to decline 0.1%. The ISM Manufacturing Index improved in February to 53.2 from 51.3 in January while the expected an increase to 51.3. In January, the Federal Reserve regional manufacturing surveys showed stronger manufacturing conditions. Yet, the national ISM Index recorded its biggest one-month fall since October 2008.
Separately, personal income increased 0.3% in January after being unchanged in December. That was exactly what the consensus expected. Personal spending levels increased 0.4% in January after increasing a downwardly revised 0.1% (from 0.4%) in December. The consensus expected personal spending to increase 0.1%.
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