Gold up at 6-month high as Ukraine, China prompt safe-haven bids

SINGAPORE, March 13 (Reuters): Gold extended gains to a third session on Thursday, scaling fresh six-month highs as investors sought to hedge their bets against geopolitical tensions in Ukraine and economic slowdown fears in China.
Gold is seen as a safe-haven asset during times of economic and political uncertainty, when the metal is preferred by investors over riskier assets such as equities. It has gained 14 per cent so far this year on the global uncertainties.
A recent bond default in China and a weak exports report sent equities and base metals lower. More data on Thursday showed China's economy slowed markedly in the first two months of the year, with growth in investment, retail sales and factory output all falling to multi-year lows.
Spot gold rose 0.4 per cent to $1,371.76 an ounce by 0737 GMT, after jumping 1.3 per cent on Wednesday. The metal earlier on Thursday hit $1,374.85, its highest since Sept. 10.
Technical buying has also been supportive of price momentum in the last two sessions, especially after prices cleared a recent high near $1,355 an ounce.
"Given bullion's technical break, it may be at risk of profit-taking in the near term, barring an escalation of Eastern European tensions," HSBC analysts said in a note.
"Geopolitical events can have a pronounced, but sometimes short-lived impact on gold."
Reuters technicals analyst Wang Tao said spot gold faces resistance at $1,375-$1,377, a break above which will open the way towards $1,433.31, the Aug. 28 high.