Aug. 26 (Bloomberg) -- Gold rose the most in almost three weeks in New York on speculation prices near a two-month low will encourage physical buying as investors weigh tension over Ukraine and the Middle East.
Russian President Vladimir Putin is set to meet his Ukrainian counterpart, Petro Poroshenko, today, as Ukraine said yesterday an armored column including 10 tanks entered from Russia as the government in Moscow announced plans to send a second convoy with humanitarian aid into rebel-held Ukrainian territory.
Bullion slid to a two-month low of $1,273.40 an ounce on Aug. 21, on expectations the Federal Reserve may hike interest rates sooner than expected. Fed Chair Janet Yellen hinted in an address at Jackson Hole, Wyoming the following day that the timeline for rate increases could be brought forward, with U.S. policy makers already paring back asset purchases.
“Gold may be picking up a little bit of bargain-hunting interest,” James Moore, an analyst at FastMarkets Ltd. in London, said today by phone. Ukraine and the Middle East “are helping keep gold underpinned.”
Gold for December delivery rose 0.7 percent to $1,287.70 by 7:26 a.m. on the Comex in New York. Prices climbed as much as 1 percent, the biggest intraday gain since Aug. 6. Bullion for immediate delivery advanced 0.8 percent to $1,287.13 in London, according to Bloomberg generic pricing.
Futures trading volume was 9.7 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg show.
In the Middle East, the U.S. hasn’t decided whether to attack Islamic State targets inside Syria, Libya called for international help amid growing violence between rival militias, while Israel and the Gaza Strip’s ruling Hamas group showed no sign of backing down as Egyptian mediators tried to coax them back into a temporary cease-fire.
Belarus, Ecuador and Mexico were among nations that reduced gold reserves in July, while Russia and Kazakhstan increased them, data on the International Monetary Fund’s website show.
Silver for December delivery gained 0.8 percent to $19.58 an ounce in New York. Platinum for October delivery rose 0.4 percent to $1,423.80 an ounce, after touching $1,413.50, the lowest since May 1. Palladium for December delivery fell 0.6 percent to $885.85 an ounce. It reached a 13-year high of $902.75 on Aug. 18.
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