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Gold moves higher as markets monitor geopolitical tension

Published 08/12/2014, 03:52 AM
Updated 08/12/2014, 03:52 AM
Gold remains supported by Ukraine, Iraq tension

Investing.com - Gold futures edged higher on Tuesday, as market players continued to monitor geopolitical developments in Ukraine, Iraq and Gaza.

On the Comex division of the New York Mercantile Exchange, gold for December delivery tacked on 0.29%, or $3.80, to trade at $1,314.30 a troy ounce during European morning hours.

Prices held in a narrow range between $1,306.90 and $1,314.70 an ounce. A day earlier, gold prices declined 0.04%, or 50 cents, to settle at $1,310.50.

Futures were likely to find support at $1,288.50, the low from August 6 and resistance at $1,324.30, the high from August 8.

In Iraq, Haidar al-Abadi, the deputy speaker of parliament, was named as the new prime minister on Monday in place of Nuri al-Maliki, but Maliki has refused to step down and deployed special forces in Baghdad.

Maliki said the decision was a "dangerous violation" of the constitution and vowed to "fix the mistake".

U.S. President Barack Obama said the naming of Abadi was an important step for Iraq towards rebuffing Islamic State militants.

The U.S. recently began air strikes targeting jihadi militants from the Islamic State insurgent group in the northern part of the country in an effort to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.

Meanwhile, in Ukraine, a Russian convoy of 280 trucks carrying humanitarian aid set off on Tuesday amid Western warnings against using help as a pretext for an invasion.

Ukraine has claimed that 45,000 Russian troops have amassed on its border, while NATO warned that there was a "high probability" Moscow would intervene militarily in the country's east, where government forces are closing in on pro-Russia separatists.

Elsewhere, a 72-hour ceasefire which began late on Sunday evening between Israel and Hamas in Gaza held for a second day, following a month of violence in the Hamas-ruled territory.

Gold is often seen as a haven investment in times of geopolitical uncertainty.

Also on the Comex, silver for September delivery eased up 0.17%, or 3.5 cents, to trade at $20.13 a troy ounce.

Elsewhere in metals trading, copper for September delivery tacked on 0.08%, or 0.3 cents, to trade at $3.177 a pound, as investors turned cautious ahead of key economic data out of China.

Industrial production, retail sales and urban investment figures for the month of July are due for release on Wednesday.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

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