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Gold flat as Ukraine and Gaza dominate headlines

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Gold was flat as the geopolitical events in Ukraine and Gaza continued to dominate headlines.

European Union foreign ministers met today to discuss further action against Russia, with some countries pushing for a weapons ban in addition to tougher sanctions. The US, meanwhile, stepped up its efforts to broker a cease fire between Israel and the Palestinians. 

Spot gold was US$1 higher at US$1,313, with more gains for the US equity markets and also the US dollar keeping a lid on the metal. Gold traditionally moves counter the US currency. 

Consumer demand from Asia was expected to be one of the main props for gold in 2014 but so far physical buying has been muted. India’s appetite has been curbed by the import controls, while early year demand from China has dropped off significantly. 

Switzerland announced today it exported 101.5 tons in June. Brokers suggested much of this headed to India as part of a re-stocking surge after the new government left import duties unchanged in its first budget.

China and Hong Kong, however, accounted for only a tiny portion of the amount exported underlining the current weak Chinese demand for gold, said Commerzbank. 

Trading was also subdued ahead of June’s US consumer inflation number. Prices rose by 0.3% after a 0.4% gain in May.

Other metals were mixed with silver slightly higher at US$20.92, while platinum was flat at US$1,483.

Market movers

Randgold Resources up 5p at 5,110p

Fresnillo up 13p at 930p

Anglo American up 51p at 1,598p

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