Gold Price Today Has Best Close in a Month

The gold price rose over the key $1,300 level Friday as tensions in Ukraine once again neared a boiling point.

gold pricesAt Friday's close on the Comex, gold for June delivery settled at $1,302.90, up $19.50 for the day, its best close in a month. Spot gold, which traded as high as $1,306 in Friday's session, was last up by $16.70, or 1.3%, to $1,302.60, putting the yellow metal on pace for its biggest gain since April 4.

Coveted as an insurance against geopolitical risks and devalued currencies because it tends to hold its value as other assets decline, the gold price rose after violence escalated Friday in eastern Ukraine.

Defying President Vladimir Putin's demand to pull back troops, Ukraine sent armored vehicles and artillery to take back the key city of Slovyansk from pro-Russian forces. Two Ukrainian soldiers were killed and seven wounded in Friday's clashes.

Amid the melee, U.S. President Barack Obama said the United States and Germany are preparing to impose further sanctions on Russia's seriously struggling economic sectors. President Obama said he hopes not to have to use such sanctions, but is prepared to if Russia's disruptions mount and interfere with Ukraine's May 25 elections.

Russia's economy has sorely suffered since the Ukraine crisis ignited in late February. The country is feeling fiscal pains - even though the United States and Europe haven't yet imposed the sweeping sanctions Russia could face should it continue to challenge the pro-Western government in Kiev.

Buoyed by the mushrooming crisis between Russia and Ukraine, gold prices have risen 6.7% year to date. Another catalyst for the precious metal this year has been a spate of anemic economic data. But, the simmering geopolitical tensions, which have stoked a flight to safety, have been the key facilitator for the gold price over the last several weeks.

Even Friday's much better than expected April jobs report didn't dent today's gold rally. Geopolitical woes abroad trumped Friday's questionably optimistic headline U.S. economic data. Investors were eager to buy gold before the weekend, hoping to avoid being caught empty-handed should developments in Ukraine worsen.

"Despite the upbeat jobs outlook and improving U.S. economic outlook, traders still remain focused on the larger geopolitical risks as things in Ukraine are starting to take another downturn ahead of a long weekend," Phil Streible, senior commodity broker at R.J. O'Brien & Associates in Chicago, told Bloomberg. "It's the kind of news that gets people worried and they start seeking safety in gold."

Friday's gold price gains were the first in four sessions of losses. Yellow metal prices fell 1.3% Monday through Thursday.

Obstacles holding gold back over the week (and the last two months) include a strong stock market, rising interest rates, and the U.S. Federal Reserve's ongoing taper. Wednesday, at the conclusion of its two-day April FOMC meeting, the central bank confirmed it will continue to reduce assets buying by another $10 billion to $45 billion an April 30, its fourth consecutive cut.

But, thanks to Friday's rally, the gold price managed to eke out a $2.10 gain for the week.

Physical demand for gold is indeed showing signs of life amid all the global uncertainty and soft economic data. Those issues will be a driver or roadblock, depending on developments, for yellow metal prices next week.

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