March 4 (Bloomberg) -- Gold fell from the highest price in more than four months as Russian President Vladimir Putin said there’s no immediate need to send troops to Ukraine, lessening demand for a haven.
Bullion futures rose as much as 2.5 percent yesterday as Ukraine said Russia ordered Ukrainian warships in Crimea to surrender. Putin said today he’d only send soldiers to the country in an extreme case and isn’t considering absorbing the Black Sea region of Crimea. Russia ended military exercises in its western area as scheduled, Interfax reported.
Gold gained 11 percent this year, rebounding from the biggest annual decline since 1981, as signs of slowing economic growth increased demand. U.S. data yesterday showed that manufacturing and consumer spending beat analysts’ estimates after Federal Reserve Chair Janet Yellen said last week the central bank is “open to reconsidering” the pace of stimulus cutbacks should the economy weaken.
“Movement in gold prices is likely to be driven by events unfolding between Ukraine and Russia,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report. “We believe that much of the risk premium has already been priced into gold in the past few sessions. Gold could come under a heavy bout of profit-taking pressure in case Ukrainian worries ease and forthcoming U.S. data this week top market estimates.”
Gold for April delivery fell 1.2 percent to $1,334.50 an ounce by 7:55 a.m. on the Comex in New York. It reached $1,355 yesterday, the highest since Oct. 30. Futures trading volume was 39 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Bullion for immediate delivery lost 1.2 percent to $1,334.17 in London.
The standoff has roiled global markets after Russian forces seized the Crimean peninsula in southern Ukraine. Troops had moved to western and central military districts as part of military exercises, the Russian Defense Ministry said in a statement last month. Putin ordered troops to return to bases, Interfax said, citing the president’s spokesman Dmitry Peskov. U.S. Secretary of State John Kerry is due to arrive today in Kiev.
“The current round of gains may retrace should the tension in the Ukraine ease,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group, wrote in a note before prices retreated today. Gold probably extended losses after the Interfax report, Thianpiriya said in a separate e-mail.
Gold’s 14-day relative strength index climbed yesterday to near 70, a level signaling to those who study technical charts that prices may be set to decline. It was at 61.4 today.
Silver for May delivery fell 1.5 percent to $21.155 an ounce in New York. Palladium for June delivery slipped 0.4 percent to $746.80 an ounce, after reaching $751, the highest since Jan. 21. Platinum for April delivery declined 1.1 percent to $1,445.10 an ounce. It touched $1,464.90 yesterday, the highest since Jan. 23.
The biggest union at South African operations of the world’s three largest platinum producers eased its pay demands as a strike that’s crippling most of their operations comes to the end of its sixth week.
The Association of Mineworkers and Construction Union will now give Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc three years to reach the labor organization’s demand for basic monthly wages of the lowest-paid employees to reach 12,500 rand ($1,156), AMCU President Joseph Mathunjwa said.
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