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BookmarkSAN FRANCISCO (MarketWatch) — Gold futures climbed on Thursday, with prices headed toward $1,300 an ounce as tensions between Ukraine and Russia intensified, buoying the metal’s safe-haven appeal.
Support from developments in Ukraine offset earlier pressure from a stronger-than-expected reading on durable-goods orders, which bolstered expectations that economic growth could pick up, suggesting the Federal Reserve will continue reducing its monetary stimulus.
Gold futures have fallen below a technical support level of $1,278.
Gold for June delivery GCM4 +0.40% tacked on $5, or 0.4%, to $1,289.60 an ounce on the Comex division of the New York Mercantile Exchange after trading as low as $1,268.40 in electronic trading.
Prices were trading at under $1,280 when news reports emerged that Russia planned to launch military exercises near the Ukraine border in response to the latest clashes in which at least five pro-Russian activists were killed.
Reports of “military exercise plans by Russia has caused a sell off for the equity markets and this is has pushed the gold strongly up from its low,” said Naeem Aslam, chief market analyst at AvaTrade.
“Traders are taking this threat very seriously and we having seen a hasty change in sentiment on our end,” he said. “If Russia does follow its plan, then we will anticipate a further sharp selloff across the board for the equity markets and groundbreaking earnings reports from Apple and Facebook may not be able to pull the markets up.”
Given all that, “gold could be the biggest beneficiary of this situation and in no time we could be back above the $1,300 level. The dollar index DXY -0.09% is strongly under pressure as well after this news,” he said.
The market was focused on U.S. economic data early Thursday. The number of Americans who applied for unemployment benefits last week rose to the highest level in April but March orders for durable goods jumped 2.6% — the biggest gain in four months.
Elsewhere in the metals complex, prices traded broadly higher. May silver SIK4 +1.01% climbed 29 cents, or 1.5%, to trade at $19.73 an ounce. High-grade copper for May delivery HGK4 +1.99% rose nearly 5 cents, or 1.6%, to $3.11 a pound.
July platinum PLN4 +0.51% added $8.10, or 0.6%, to trade at $1,410.80 an ounce. June palladium PAM4 +2.05% rose $15.15, or 1.9%, to $800.75 an ounce.
Gold and silver miners traded mainly lower, however, with the Philadelphia Gold and Silver Index XAU -0.53% losing 0.3%. Shares of Freeport-McMoRan Copper & Gold Inc.FCX +2.12% tacked on 2.1% after the company early Thursday reported first-quarter earnings that declined from a year ago, but topped Wall Street’s expectations.
