Spot gold rose to $1,375 an ounce, after hitting a fresh six-month high of $1,376. On Sunday there would be a secession referendum in Crimea as Russia looks to takeover the territory. This is likely to push gold prices even higher next week. As we write, reports suggest that, John Kerry, US Secretary of State has failed to make any breakthrough in talks. Crimea is all set for a referendum that would pave its way to join Russia.
Gold is already up 13 percent so far this year.
Two things are already working in favour of gold. One is the worries over Ukraine and the other is poor Chinese data, which keeps surprising the markets.
Chinese industrial production was awful and rose at its slowest pace in five years in early 2014. To compound the misery retail sales also weakened. Premier Li Keqiang was said to have warned of "serious challenges" ahead.
We are going to confront serious challenges this year and some challenges may be even more complex," he said.
"[China must] ensure steady growth, ensure employment, avert inflation and defuse risks. So we need to strike a proper balance amidst all these goals and objectives. This is not going to be easy," the Telegraph, UK, quoted the Premier. As economic conditions deteriorate investors turn to gold as a safe haven.
Russia is looking to tighten its stranglehold over Crimea. A vote is slated on Sunday and gold prices surely will rally on Monday.
On Tuesday we have the US Fed Meeting, which is likely announce a further taper of its QE3 programme. That could possibly cool gold prices somewhat. It's certain that next week is likely to see gold prices being volatile, as there are a number of events. Buy, if you have a stomach for volatility.