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Gold Set for Monthly Drop as U.S. to Ukraine Curbs Haven Demand

May 30 (Bloomberg) -- Gold traded near a 16-week low and headed for a monthly loss as signs of an improving U.S. economy and easing of tension in Ukraine curbed demand for a haven. Palladium was set for a fourth monthly advance.

Bullion is set for a 2.8 percent monthly drop after data showed this week U.S. durable goods orders unexpectedly rose in April and global equities reached the highest since 2007. Gold’s drop yesterday sent the metal’s 14-day relative-strength index below the level of 30 that suggests a potential impending rebound to some analysts who study technical charts.

Russia has pulled back most of its troops from the border with Ukraine, according to a U.S. defense official, a move that if completed would fulfill a pledge by Russian President Vladimir Putin. A recent surge in fighting produced a new round of finger-pointing between the U.S. and Russia, the top supplier of palladium. That metal climbed to the highest since August 2011 this week as a mine strike in South Africa continued.

“Risk appetite has been improving,” said Sarah Xie, an analyst at Hong Kong-based Wing Fung Financial Group Ltd. “Investors are transferring their capital from gold to the stock market. Turmoil in Ukraine has eased.”

Bullion for immediate delivery was little changed at $1,254.93 an ounce by 9:12 a.m. in London, according to Bloomberg generic pricing. It reached $1,251.56 yesterday, the lowest since Feb. 4. Gold for August delivery lost 0.2 percent to $1,254.20 on the Comex in New York.

Trading Volume

Futures trading volumes were 27 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Gold slumped 28 percent last year on expectations that the Federal Reserve will reduce asset purchases as the economy recovers.

“Barring a serious conflagration out of the Ukraine that could involve the Russians, we think prices will likely continue to work lower given gold’s poor technical profile,” Edward Meir, an analyst at INTL FCStone in New York, wrote in a report e-mailed today.

Fighting renewed questions about Russia’s pledge to pull back its troops from Ukraine’s borders. Confirmation of the partial withdrawal emerged hours after pro-Russian rebels downed a military helicopter in eastern Ukraine, killing a general and 13 troops.

Silver lost 0.2 percent to $19.0033 an ounce in London, after dropping to $18.8045 yesterday, the lowest since July 8. It’s set for a third monthly drop. Platinum added 0.1 percent to $1,460.75 an ounce. Palladium fell 0.3 percent to $832.75 an ounce. It reached $845.24 two days ago, the highest since August 2011.

The metal is heading for a fourth month of gains, the longest such run since January 2011, as mine workers have downed tools since January in South Africa, the second-biggest producer. Palladium-backed exchange-traded-product holdings reached a record yesterday and platinum assets were at an all- time high on May 28, data compiled by Bloomberg show.

Talks will resume today between Anglo American Platinum Ltd., Impala Platinum Holdings Ltd., Lonmin Plc and the Association of Mineworkers and Construction Union to end the strike in South Africa, the top platinum supplier.

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