Gold held near the lowest level in almost 16 weeks as investors assessed whether tension between Russia and Ukraine is easing and as the euro weakened, reducing the appeal of the metal. Palladium traded near a 34-month high.
Bullion for immediate delivery was at $1,258.77 an ounce by 9:04 a.m. in Singapore from $1,258.14 yesterday, according to Bloomberg generic pricing. Gold sank to $1,256.07 yesterday, the lowest since Feb. 6, as Russia’s President Vladimir Putin showed a willingness to work with Ukraine’s new leadership.
Gold has risen 4.8 percent this year partly on unrest in Ukraine. The 14-day relative-strength index fell to 30.5 yesterday, the lowest since December. That level suggests a potential rebound to some analysts who study technical charts. The gauge was at 30.8 today.
“Gold has finally broken through its narrow trading range,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co. in Shanghai. “The weaker euro has weighed on gold, while the background support from Ukraine seems to be fading.”
Gold has dropped 2.5 percent this month as the euro weakened 1.9 percent versus the dollar, reaching the lowest level in more than three months yesterday, on expectation that the European Central Bank will add stimulus in June. Bullion denominated in U.S. dollars becomes more expensive for holders of other currencies when the greenback strengthens.
Gold for August delivery fell as much as 0.2 percent to $1,256.90 an ounce on the Comex in New York, before trading at $1,258.90. The most-active contract slid to $1,256.10 yesterday, the lowest level since Feb. 7.