Gold hits six-month highs on Ukraine, China worries
Gold has gained nearly 3 per cent, marking its sixth straight weekly rise
Gold rose to fresh six-month highs on Friday and headed for its biggest weekly gain in four weeks, buoyed by mounting tensions between Russia and the West over Ukraine, and worries over an economic slowdown in China.
The metal has gained nearly 3 per cent this week, marking its sixth straight weekly rise, as investors exited riskier assets such as equities.
While money flowing into gold-backed exchange-traded funds has increased, reflecting confidence in the metal's outlook, physical demand has quietened as higher prices put off buyers - making some cautious about how long the rally can last.
"While gold's push higher is attracting greater investment demand, higher prices may be cooling emerging market physical appetite," said HSBC analysts. "Gold will face increasingly stiff resistance on further rallies and will likely need a stronger euro to move significantly higher.” Spot gold rose 0.4 percent to $1,374.85 an ounce .
Prices on the Shanghai Gold Exchange were about $3 an ounce lower than London prices, compared with a premiums of over $20 earlier this year.
Physical buying in other Asian regions has also slowed, with some selling to make a profit from rising prices.
Gold is getting its biggest support from the crisis in Ukraine, which has caused the biggest stand-off between Russia and the West since the Cold War.