Gold eased lower even though the referendum in Crime overwhelmingly returned a vote in favour of becoming part of Russia.
Traders said investors were waiting to see the response of Western leaders with meetings scheduled in Europe today to coordinate a response. Sanctions are certain to be imposed but how stringent they will be is the unknown.
The results of the referendum were declared illegal by the West, with the likelihood now that Russia will annexe the Ukrainian province.
The uncertainty over Ukraine has pushed gold up to its highest point since September, driven largely by institutional and speculative buying.
Long-side buyers have increased sharply in number in recent weeks, while the sales of gold through exchange traded funds have slowed to the point where money is starting to come back in again.
Gold has rallied more than 14% since the start of 2014 and broker Canaccord said it saw it as a response to robust physical demand and a pick-up in investment .
“Given the worries of further potential corporate bond defaults in China and global geopolitical tensions between Russia and the West over Ukraine we see potential for the gold price to rally further in the near term before easing.
“Our average 2014-2018 gold price assumption rises 6% to US$1,354/oz, and long-term projection rises 5% to US$1,455/oz. This drives EPS upgrades and an average 25% increase in target prices across our coverage.”
Tomorrow sees the start of Janet Yellen’s first meeting in charge of the US Federal Reserve’s interest rate setting committee.
Spot gold was trading US$3 higher at US$1,379. Silver edged lower to US£21.36 while platinum added US$4 to US$1,469.
Market movers
Randgold Resources up 19p at 5,015p
Fresnillo unchanged at 925p
Anglo American up 41p at 1,464p