Gold futures prices slip lower on profit-taking, safe-haven bids support after Malaysian airliner crash

Gold futures prices slip lower on profit-taking, safe-haven bids support after Malaysian airliner crash

Gold futures edge fell lower on Friday, since the operators locked-in profits wake of the recent upward trend in the precious metal due to increasing safe-haven demand in the midst of geopolitical tensions in Ukraine and the Middle East. But the metal is further supported by a wave of risk aversion after a Malaysian aircraft was shot down in eastern Ukraine, killing nearly 300 people.

At the US Comex Exchange, gold for August futures contract was quoted at $ 1,312.60 a troy ounce during European afternoon trade, down 0.33%. August gold contract settled 1.32% higher on Thursday to close at $ 1,316.9 per troy ounce

Spot gold was fallen 0.1 percent to $ 1315.40 an ounce at 0254 GMT. Asian shares slumped in early trading and a decline in Treasury yields pushed the dollar after news of the felled Malaysia Airlines plane sent investors running in defensive assets.

The stock lost 13% to 19.5 sen as of 9:59 am in Kuala Lumpur, to drop this year runs to 37%, while Malaysia Airports Holdings Bhd fallen 4.2%. The FTSE Bursa Malaysia KLCI Index fell 0.4% and 0.4% Malaysian ringgit weakened versus the dollar. The Bloomberg World Airlines Index fell 0.2%, after a decline of 2% on Thursday amid speculation that the accident will deter flyers.

The crash came a day after the USA and the EU announced another round of sanctions against Russia, after the annexation of Crimea in April and the ongoing tensions in the rest of Ukraine. The package of the United States was the major round of UN sanctions to date.

Precious metal also found support after Israel said late Thursday starting a ground war in Gaza after 10 days of air and ship bombing not succeeded in stopping Palestinian rocket attacks.

Gold, seen like an alternative investment in times of geopolitical concerns, rose 1.5 percent at the previous session after the news broke airplane accident, a Ukrainian official said was caused by a missile fired by militants pro-Russian .

The Happening sharply raised the shareholdings in a dispute between Kiev and Moscow pro-rebels has been occurring for months, and has increased tensions between Russia and the West.

However, the metal has dropped and nearly 2 percent in the week after a six-week winning run, as fears of financial problems in a molten Bank of Portugal and as investors worry about a hike sooner expected in interest rates in the United States.

On a measurement of investor confidence, SPDR Gold Trust exchange-traded fund backed world’s largest gold, said its holdings fell 2.69 tonnes to 803.34 tonnes on Thursday.

“We hope generate high volatility in gold, as well as a lean to climb over dip” 100McxTips Commodity Futures analysts said in a research note, quoted of geopolitical tensions.

At the Multi Commodity Exchange, gold August futures fell by Rs 44, or 0.16 per cent to Rs 28,155 per 10 grams in early morning trade.

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Posted in Commodity, Stocks Market

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