March 12, 2014 / 11:22 AM / 6 years ago

PRECIOUS-Gold up 1.3 pct to highest since Sept on China, Ukraine

* China's first bond default, weak exports stir fears
    * U.S. gold futures volume set for biggest since late Jan.
    * Ukraine tensions underpin gold demand
    * Coming up: U.S. import, export prices, jobless claims

 (Adds comment, second byline, dateline, updates market
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, March 12 (Reuters) - Gold surged 1.3
percent on Wednesday, hitting a near six-month high as fears of
more corporate defaults in China and the geopolitical tug-of-war
between Russia, Ukraine and the West boosted bullion's appeal as
an insurance against riskier assets.  
    China's first bond default and weak data on exports have
stoked concerns about the health of the world's second-biggest
economy, sending London copper prices to their lowest in
44 months. Copper is often put up as collateral for lending.
    Fears that China's economy, the world's second largest after
the United States, is slowing triggered gold buying and dampened
demand for riskier assets such as equities.
    "For these last sessions, we have had a very definitive
China-led safe-haven bid," said Frank McGhee, head precious
metals dealer at Chicago commodities brokerage Alliance
Financial LLC.
    "Gold benefits from China's bond default and the industrial
metals are getting whacked on the anticipation that China is
slowing much quicker than people thought," he said.    
    Spot gold gained 1.3 percent to $1,367.04 an ounce by
1:59 p.m. EDT (1759 GMT), having reached $1,370.60, the loftiest
since Sept. 20.
    U.S. COMEX gold futures for April delivery settled up
$23.80 at $1,370.50 an ounce. 
    Trading volume was about 250,000 lots, 65 percent above its
30-day average, preliminary Reuters data showed. Wednesday's
turnover is set to be its highest since Jan. 29.
    Tensions between Ukraine and Russia are also weighing on
appetite for risk globally on a growing chance of western
sanctions over Crimea.
    The Group of Seven advanced economies will demand that
Russia halt efforts to annex Ukraine's Crimea region in a
statement to be issued on Wednesday. 
    The market is awaiting the Federal Reserve's policy meeting
on March 18-19. The U.S. central bank is most likely to announce
another $10 billion cut to its monthly bond-buying stimulus,
even after a series of U.S. economic data showing that growth
has been hurt by harsh winter weather.
    In a sign of investor confidence in bullion, gold-backed
exchange-traded products saw inflows of $500 million in
February, a reversal from 13 consecutive months of outflows,
according to BlackRock. 
    In other precious metals, silver gained 2.1 percent
to $21.25 an ounce. Platinum was up 0.8 percent at $1,469
an ounce, while palladium rose 0.8 percent to $771.10 an
 1:59 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1370.50  23.80   1.8  1345.60 1371.30  203,583
 US Silver MAY  21.358  0.543   2.6   20.820  21.435   54,872
 US Plat APR   1476.30  11.70   0.8  1458.30 1481.80   10,622
 US Pall JUN    777.15   6.65   0.9   762.10  779.15    5,061
 Gold          1367.04  17.70   1.3  1345.70 1370.60         
 Silver         21.250  0.430   2.1   20.820  21.390
 Platinum      1469.00  11.20   0.8  1458.50 1478.50
 Palladium      771.10   6.40   0.8   763.00  777.00
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        247,768   151,487   183,730     16.97    0.54
 US Silver       61,741    76,123    57,921     25.23    0.01
 US Platinum     12,668    12,342    13,087     18.24    0.50
 US Palladium     5,074     8,251     5,658     20.04   -3.08
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Louise Heavens, David Evans and James Dalgleish)
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