(Reuters) – Gold price rose 1.4% on Monday, hovering around $1,344 per ounce. Prices broke the 4-month high of $1,345.35 reached last week by hitting $1,349.68 mark today.
Last week, soft economic data released in the U.S. and China suggested a slowdown in economic recovery pace and economic growth respectively. Furthermore, the turmoil in Ukraine hurt Asian markets and spurs gold safe-haven demand.
China’s industrial sector showed signs of slowing down as the Purchasing Managers Index (PMI) reach an 8-month low in February. Russian stock-market lost 9% on Monday, while Nikkei lost 1.3% of its value. And not just Asian bourses, the German DAX lost 2.5% and most European stock exchange markets were down by over 1%.
Analysts say this is the reaction of the market to the Crisis in Ukraine. Russia has a parliament permission to use military force to “protect Russian citizens in Ukraine”. Western world leaders oppose this step and expressed “grave concerns”.
Military conflict in Ukraine might hurt the world economy. Ukraine is one of the world-top wheat suppliers, plus other resources such as oils and minerals. Moreover, the Black Sea is a major trade route of oils and commodities. This situation might increase gold safe-haven demand and be beneficial to gold price.