Gold prices have inched lower with it becoming increasingly clear there’s little the US and European Union are willing to do to prevent Russia from annexing Crimea.
In a hastily called referendum on Sunday, 97 per cent of Crimean voters supported unification with Russia. The US and European Union, calling the referendum illegal, slapped sanctions on Russian and Crimean officials they deemed responsible for the vote.
However, the sanctions look unlikely to target broader economic relations between Russia and the West.
Gold for April delivery, the most active contract, on Monday fell $US6.10, or 0.4 per cent, to trade at $US1,372.90 a troy ounce on the Comex division of the New York Mercantile Exchange. The precious metal hit a fresh six-month high of $US1,388.40 on Sunday.
“Everyone wanted to understand what the world will do about the Ukraine situation, and now it’s obvious that it will do nothing,” said James Cordier, a principle at Liberty Trading Group.
“There were no shots fired, and things in Crimea are about as orderly as one can expect.”
Gold has marched higher in recent weeks, as investors stocked up on the store-of-value asset amid worries about the US economy and an escalating crisis in Eastern Europe. Some traders view gold as a hedge against political and economic uncertainty, because it tends to keep its value during periods of instability.
Better-than-expected US industrial production for February also gave investors a reason to sell the precious metal. Gold has benefited in recent months, as doubts set in about the strength of the US recovery.
Industrial production, which measures the output of US manufacturers, utilities and mines, increased a seasonally-adjusted 0.6 per cent in February from the previous month, the Federal Reserve said on Monday.
Economists surveyed by Dow Jones had forecast output would rise 0.1 per cent.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $US1,378.50; previous PM $US1,385.00
Apr gold $US1,372.900, down $US6.10; Range $US1,370.00-$US1,382.90
May silver $US21.275, down 13.8 cents; Range $US21.225-$US21.445
Apr platinum $US1,468.40, down $US1.20; Range $US1,466.10-$US1,483.20
Jun palladium $US776.40, up 80 cents; Range $US770.00-$US780.90