Gold falls to 1-week low on euro despite rising Ukraine tensions

Gold fell to its lowest in a week on Monday as the euro hovered near a one-month low on fears of policy action from the European Central Bank, shrugging off safe-haven demand from escalating violence in Ukraine.
Spot gold eased 0.5 percent to $1,282.50 an ounce by 0028 GMT, after dropping for two straight weeks. It fell to a one-week low of $1,279.60 earlier in the session.
The euro has lost more than 1 percent since Thursday when Mario Draghi said the bank was ready to take action next month should updated inflation forecasts merit it. A stronger dollar in turn makes bullion more expensive for holders of other currencies.
Investors seemed to ignore weekend developments in Ukraine, where pro-Moscow rebels declared a resounding victory in a referendum on self-rule for eastern Ukraine, with some saying that meant independence and others eventual union with Russia as fighting flared in a conflict increasingly out of control.
Hedge funds and money managers raised their bullish bets in gold futures and options for the second time in two weeks, as rising geopolitical tensions in Ukraine increased bullion’s safe-haven appeal, according to data from the Commodity Futures Trading Commission on Friday.
Gold imports in India, the second-biggest consumer of bullion, fell 74 percent in April to $1.76 billion from a year earlier.
Source:Bullion Bulletin

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