gold futures

gold futures

July 17th, 2014

Gold futures prices headed for the biggest gain in four weeks after Ukraine said rebels shot down a Malaysian jet carrying 295 people near its border with Russia.

The Boeing 777 flight between Amsterdam and Kuala Lumpur was hit by a missile and went down near the eastern town of Torez, Ukrainian Interior Minister adviser Anton Gerashchenko said on his Facebook page. Gold rose earlier as the U.S. and the European Union imposed the most aggressive sanctions to date on Russian business.

Bullion has rallied about 10 percent this year, beating gains for commodities, equities and Treasuries, as violence in Iraq and hostilities between Ukraine and Russia boosted demand for a haven asset. Gold also rose as the Federal Reserve has signaled interest rates will stay near a record low.

The news of the jet crash “heightened concerns over the tensions in Russia and Ukraine, and definitely triggered safe-haven buying,” Chris Gaffney, a senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview.

Gold futures for August delivery rose 1.3 percent to $1,316.20 an ounce at 12:39 p.m. on the Comex in New York, heading for the biggest gain since June 19.

Reports of the plane crash come a day after the U.S. and the European Union widened sanctions and said more may follow. Targeted companies include OAO Rosneft, Russia’s largest oil company, natural gas producer OAO Novatek, OAO Gazprombank, the country’s third-largest lender, and eight defense firms.

Palladium Sentiment

On the New York Mercantile Exchange, palladium futures for September delivery climbed 1 percent to $885.05 an ounce after touching $890, the highest since February 2001.

Russia is the largest supplier of the metal, which along with platinum is used in automobile pollution-control devices. European car sales rose for a 10th month in June in the longest stretch of gains in four years, the Brussels-based European Automobile Manufacturers’ Association said today.

Supplies were disrupted amid a five-month mining strike that ended in June in South Africa, the biggest producer of platinum and the second-largest for palladium.

“There’s a confluence of positive factors for palladium, with good car sales and supply constraints in South Africa,” Robin Bhar, an analyst at Societe Generale SA in London, said by phone today. “With Russia, it’s more sentiment. The market is not too concerned, but is keeping a watchful eye just in case.”

Platinum futures for October delivery gained 1.2 percent to $1,504 an ounce on the Nymex. Silver futures for September delivery rose 1.8 percent to $21.145 an ounce on the Comex, after reaching $20.63 yesterday, the lowest since June 20.

- Luzi Ann Javier in New York at Bloomberg.