Gold contracts traded near yesterdays closing price during early hours in Europe today. On Wednesday Russian President Vladimir Putin signified a shift in Kremlins tone, asking rebels to put-off an independence referendum, and pulling troops away from the border, which pressured safe-haven demand for gold. Elsewhere, Feds Chair Janet Yellen confirmed continuing support for the economy, boosting stocks.
Gold futures due in June traded for $1 291.0 per troy ounce at 8:51 GMT on the COMEX in New York today, adding 0.16% to Wednesdays closing price. Daily high and low stood at $1 292.6 and $1 287.4 per troy ounce, respectively. Yesterday the contract lost 1.51% on signs of lowering aggression in Eastern Europe.
Russian President Vladimir Putin made some steps towards reducing tensions in eastern Ukraine yesterday, as he proposed separatists postpone planned independence referendum. Pro-Russian rebels in the Donetsk region declared a “People’s Republic” yesterday, and announced an independence referendum to be held on Sunday, May 11th. The insurgents said they will “consider” Putin’s proposal, the BBC reported.
President Putin went on to add that the presidential election in Ukraine due on May 25th is a step in the right direction, though previously Russian Foreign Minister Sergei Lavrov urged the vote be put-off, in light of the violence in the country. The Kremlin also announced that it is withdrawing troops from the border, though Ukrainian or NATO officials have yet to confirm.
Previously, confrontations between the military and rebels failed to produce a decisive outcome. Sloviansk remains in militant hands, though blockaded, after a bloody battle earlier this week, while many towns in the Donetsk region are also occupied by separatists, who don’t recognize Kiev’s authority.
“The outlook for gold from here is dependent on how things evolve in Ukraine,” said for Reuters Barnabas Gan, analyst at OCBC Bank.”We are still bearish on gold prices and expect prices to be $1,150 by year-end on expectations that the Ukraine situation will not blow up.”
US economy
Yesterday Feds Chair Janet Yellen testified that the Federal Reserve will continue supporting the economy. She said that the US recovery was still fragile and could be threatened, arguing that the central bank should continue to apply the stimulus program for some time. “Many Americans who want a job are still unemployed… and inflation is below the central bank’s 2% target,” she said.
Her remarks generated fluctuations in the stocks market, which steadied for an overall increase. The accommodation policy helps the economy, lifting positive outlooks for companies and their development, which attracts investment appetite towards stocks and away from commodities, such as gold.
“The lackluster rebound this morning testifies to the lack of meaningful buying interest even after an impulsive plunge,” Phillip Futures said in a note, addressing the lowering interest in gold in context of the recovering US.
Later today Yellen will hold another testimony.
Previously, a number of reports had fomented bullish sentiment for world’s largest economy. Exports for March registered the second-highest level on record, a report on Tuesday revealed. Earlier, reports on employment, consumer spending, industrial and services outlooks all generated positive vibes, outscoring expectations and improving on previous figures.
Assets at the SPDR Gold Trust – the largest bullion-backed exchange-traded fund, remained at the lowest point since January 2009 of 782.85 tons for the fourth day yesterday. The fund has lost 10 tons last week. The discouraging outflow suggests investor interest in the precious metal is at a multi-year low, as the world economy recovers.
Technical view
According to Binary Tribune’s daily analysis, in case Gold June futures manage to breach the first resistance level at $1 307.1 on Monday, the contract will probably continue up to test $1 325.2. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 335.5.
If the contract manages to breach the first key support at $1 278.7, it will probably continue to slide and test $1 268.4. With this second key support broken, the movement to the downside may extend to $1 250.3.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
