Surprise !!! Gold Headed Towards Monthly Gain

Gold remains just above the 1290 price with low volume and no conviction as tensions seem to ease in the Ukraine. No one knows or seems to understand the Russian objective but strong US data seemed to offset any worries after US GDP soared to 4.2% and unemployment claims printed below expectations. Gold rose to the highest in more than a week as escalating tension in Ukraine spurred haven demand. Silver advanced also to trade at 19.593. Gold rose 0.5% to settle at 1,290.40 on the Comex in New York, after touching 1,297.60, the highest for a most-active contract since Aug. 20.

Ukrainian President Petro Poroshenko pledged to step up the country’s defenses against what he earlier called a “de facto” Russian incursion after separatists gained ground in eastern regions.  The U.S. said Russia may be directing the attacks, and France and Germany threatened President Vladimir Putin’s government with further sanctions.

The SPDR Gold Trust Exchange-Traded Fund one of the two major gold ETFs that trades in the United States dropped more than 1.2% last week, from 124.77 to 123.18. Gold ETFs are meant to track gold prices. Last week, the price of gold has dropped from $1,300.14 an ounce to $1,281.13 an ounce – a slide of about 1.4%. Therefore, the decrease in the price of the GLD gold ETF is a direct reflection of the falling price of gold. Gold has been hovering around a two-month low lately, culminating last week in a five-day losing streak. In short, gold prices have been weighed down for over a month now. Investors with open positions in gold or any gold-related security shouldn’t press the panic button, however, because the long-term prospects for gold are anything but grim. Gold has rebounded from a two-month low of $1,273.14 on Aug. 21 even as U.S. data that beat estimates supported the case for the Federal Reserve to raise borrowing costs sooner than forecast. Prices are heading for a monthly increase as the U.S. and Europe condemned what they said were incursions by Russia into Ukrainian territory. Platinum continues to take its cues from the precious metals group to trade at 1426.30 poised for the first back-to-back monthly drop since June 2013. Palladium fell 0.2 percent to 894.45 an ounce to trim a seventh month of gains, the longest streak since January 2011.

Gold has rallied from the biggest annual decline in more than three decades amid unrest in the Middle East and Ukraine. A truce between Israel and Gaza’s militant Hamas rulers was maintained for a third day yesterday, while President Barack Obama signaled there are no immediate plans to conduct airstrikes against Islamic State havens inside Syria and a strategy for confronting the group outside Iraq hasn’t been set.

Strong US data especially housing starts helped industrial metals, but primarily copper to gain a bit of momentum after taking a serious fall during earlier trading. Copper is holding at 3.165 well below the 3.21 level earlier this week. Copper prices fell on Thursday, under pressure from escalating tensions in Ukraine and worse-than-expected eurozone economic sentiment, while falls in aluminium prices were kept in check by tightening availability of near-term supplies.