March 12 (Bloomberg) -- Gold climbed to the highest since September as escalating tension between Russia and Ukraine spurred demand for the metal as a haven.
Prices advanced 13 percent this year partly as Russia is wresting control of Crimea, sparking the worst crisis between Russia and the West since the Cold War. Germany told Russia yesterday it must switch course in Crimea by next week or risk more sanctions, while Ukraine’s deposed Russian-backed president warned of a possible civil war. The MSCI All-Country World Index of equities declined for a fourth session, the longest slump this year.
“People are being more risk averse now and moving to safe- haven assets,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Gold will continue to move higher if the sanctions are imposed.”
Gold futures for April delivery gained 1.3 percent to $1,364.40 an ounce at 11:33 a.m. on the Comex in New York, after reaching $1,369, the highest since Sept. 19. Trading was 80 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Bullion rebounded this year amid concern that economic growth in the U.S. and China is slowing. Prices rose in four of the past five weeks.
Holdings in gold-backed exchange-traded products increased to 1,762.6 metric tons yesterday, the highest this year, data compiled by Bloomberg show. Assets reached the lowest since October 2009 last month.
The precious metal fell last year mainly on concern that the Federal Reserve would start slowing the pace of monetary stimulus. The central bank announced a $10 billion reduction in bond buying at each of its past two meetings, leaving purchases at $65 billion.
Gold surged 70 percent from December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system and lowered interest rates to a record to boost the economy. The next meeting is scheduled for March 18-19.
Goldman Sachs Group Inc. says this year’s rally will fizzle and the chances have increased that gold will slump to $1,000 for the first time since 2009.
Silver futures for May delivery rose 1.5 percent to $21.125 an ounce in New York.
Platinum futures for April delivery added 0.6 percent to $1,473.10 an ounce. Palladium futures for June delivery rose 0.5 percent to $774.20 an ounce.
The European Union announced a three-stage sanctions process against Russia, the biggest palladium miner, last week, starting with the suspension of trade and visa-liberalization talks.