(Kitco News) – Gold price hit a 6-month high in early U.S. trading session in Wednesday, 12 March 2014. Safe-haven buying pushed gold price higher as geopolitical tension in Eastern Europe tensed and more news stories about Ukraine being published.
Gold price in the spot market last quoted up $15.34 at $1,365.24 an ounce. U.S. gold futures for April delivery were up $14.40 to be traded at $1,361 per ounce.
The Ukrainian-Russian standoff increased investors concerns. Ukrainian government asked for help from the west on Tuesday to cease annexation of Crimea, Reuters said. Western analysts and reports believe that the G-7 will impose economic or diplomatic sanctions on Russia. On the other hand, a referendum from Crimean citizens is scheduled on Sunday to join the region to Russia.
Moreover, the industrial production output in the European Union fell by 0.2% in January, compared to December. Weak Chinese exports data added salt to the wound, as investors concerned about the world top economies. All these factors combined increased safe-haven demand on gold.
However, demand for physical bullion and jewelries slowed down as the prices went up. Physical demand has always been price sensitive. Gold price in the local Chinese market were lower than the spot market by $3 per ounce. China is now the world number one gold consumer.
News stories from around the world shows an increased tension, in Turkey or Ukraine for instance. Thus, increased safe-haven demand and technical buying is no surprise. Moreover, some analysts believe that the downtrend cycle of gold has ended or nearly ended, and another bull-run is on the move.