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Gold eases back after Putin speech

Last updated: 00:53 19 Mar 2014 AEDT, First published: 01:53 19 Mar 2014 AEDT

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Gold lost some of its recent shine as Russian president Vladimir Putin seemed to play down suggestions it would annexe other parts of the Ukraine. 

His comments came in a speech that confirmed Crimea would become part of the Russian Federation following the referendum in the province at the weekend.

Western governments immediately condemned the action, but to applause from his audience Putin said he was correcting a historical injustice stemming back to 1954 when Crimea joined Ukraine.

Spot gold was US$13 lower at US$1,353, with traders also having a wary eye on the start of the two-day US Federal Reserve meeting to set interest rates.

The last two meetings have each seen a US$10bn cut in the Fed’s monthly bond-buying programme and most economists expects the same tomorrow.

A reduction in the programme could boost the dollar and raise US bond yields, both of which traditionally move in the opposite direction to  the gold price.

Headwinds generally are building against gold according to Michael Widmer, a metals strategist at Bank of America Merrill Lynch, who told CNBC that deflationary fears in the euro zone could curb gold's recent rise.

Gold is traditionally seen as a hedge against inflation but with the euro zone showing little evidence of prices rising Widmer said there was little upside for gold.

Elsewhere, silver eased to US$20.77, while platinum was US$9 lower at US$1,452.

Major movers

Randgold Resources down 104p at 4,865p

Fresnillo down 50p at 874p

Anglo American up 11p at 1,472p


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