Gold Ends Above $1,300 On Ukraine Concerns; Gains 0.5% For Week

(RTTNews) - Gold futures ended higher for a third straight session on Friday, tracking declining global equity markets amid rising concerns that tensions in Ukraine could further escalate. A better-than-expected improvement in U.S. consumer sentiment did little to dampen gains made by the precious metal.

Gold prices gained about 0.5 percent for the week.

The situation in eastern Ukraine continued to remain tense, after five pro-Russia rebels were killed on Thursday. In a show of force, Russia ordered army drills near the border with Ukraine, renewing fears of its further intervention in the troubled region.

Meanwhile, U.S. Secretary of State John Kerry accusing Moscow of playing an active role in destabilizing eastern Ukraine, said Washington was getting ready for more sanctions on Russia.

Russia's central bank raised the main interest rate on Friday in a surprise move, citing substantial increase in inflation risks amid the escalating tensions over Ukraine that hurt the economy and attracted a rating downgrade.

Earlier today, rating agency Standard & Poor's cut Russia's credit rating to 'BBB-' from 'BBB' on Friday, citing the risk of marked deterioration in external financing. S&P said the negative outlook reflects its view that Russia's ratings could be lowered over the next two years if there is an increase in the risks to the country's creditworthiness.

Gold for June delivery, the most actively traded contract, gained $10.20 or 0.8 percent to close at $1,300.80 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for April delivery scaled an intraday high of $1,305.20 and a low of $1,290.40 an ounce.

On Thursday, gold futures ended at a one-week high with investors continuing to opt for the safe haven appeal of the precious metal as tensions mounting in Ukraine.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 792.14 tons on Thursday from its previous close of 794.14 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.75 on Friday, down from its previous close of 79.77 late Thursday in North American trade. The dollar scaled a high of 79.80 intraday and a low of 79.66.

The euro traded higher against the dollar at $1.3837 on Friday, as compared to its previous close of $1.3832 late Thursday in North America. The euro scaled a high of $1.3850 intraday and a low of $1.3828.

In economic news from the U.S., a report from Thomson Reuters and the University of Michigan on Friday showed consumer sentiment index to have reached a nine-month high in April, improving more than previously estimated. A final reading on the consumer sentiment index for April came in at 84.1 compared to the preliminary estimate of 82.6. This reflects a notable increase from the final March reading of 80.0, and well above economist estimates of 83.0.

From Europe, U.K. retail sales unexpectedly rose for a second straight month in March, suggesting consumer spending is set to lead the economic recovery that is gaining momentum. Retail sales including automotive fuel rose 0.1 percent month-on-month, the Office for National Statistics said Friday. That followed a 1.3 percent gain in February, which was revised down from 1.7 percent. Economists had forecast a 0.4 percent decline for March.

The Bank of Russia in a statement said its Board of Directors have decided to raise the key rate to 7.5 percent per annum, due to higher inflation risks. Economists expected the bank to leave rates unchanged this month.