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Ukraine & US Recovery Boost Demand for Precious Metals

May 14, 2014 at 21:45 by Vladimir Vyun

Gold and other precious metals rallied today as tensions in Ukraine mount ahead of the presidential elections on May 25, while two eastern regions announced their independence and desire to join Russia. Russian Foreign Minister Sergei Lavrov said today that Ukraine “is as close to civil war as you can get”. The geopolitical risks add to the attractiveness of gold as a safe haven, while economic recovery in the United States led to speculations that the precious metal may soon be needed as an inflation hedge.

Market analysts have conflicting views on the future of gold. While some remain bearish on the precious metal, others argue that it has entered a bullish trend, at least for a short term. Bullion lost 28 percent of its value last year, the biggest yearly drop since 1981.

June futures for delivery of gold rose $11.10 (0.86 percent) to $1,305.90 per troy ounce as of 21:32 GMT on COMEX today. July contract for silver jumped $0.24 (1.22 percent) to $19.79 per ounce.

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