July 17, 2014 / 6:02 PM / 6 years ago

PRECIOUS-Gold up 1.5 pct on safe-haven bids after Malaysian plane downed

* Malaysian airliner crash intensifies Ukraine tensions
    * U.S. imposes more sanctions on Russia
    * Investors monitor Israeli ground offensive in Gaza
    * Coming up: U.S. consumer sentiment Friday

 (Updates market details)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, July 17 (Reuters) - Gold surged 1.5 percent
on Thursday as investors sought shelter in the precious metal on
fears of further turmoil after news that a Malaysian passenger
jetliner had been downed in Ukraine.
    Earlier, safe-haven bids had already boosted bullion prices
on new U.S. and European Union sanctions on Russia, fresh on the
heels of news that a Ukrainian fighter plane had been shot down
over eastern Ukraine. 
    Gold rallied $20 per ounce in about 40 minutes and the S&P
500 equities index tumbled after the Malaysian airliner
was brought down over eastern Ukraine, killing all 295 people
aboard and sharply raising the stakes in a conflict between Kiev
and pro-Moscow rebels in which Russia and the West back opposing
    Also lifting gold prices was news Israeli Prime Minister
Benjamin Netanyahu on Thursday instructed the military to begin
a ground offensive in Gaza. 
    Gold investors scrambled to establish new long positions and
bought back bearish bets on the news, traders said.
    "When the news came out, it was frantic buying and
short-covering in the market, a combination of buy-stops being
triggered and traders repositioning as fast as possible," said
Phillip Streible, senior commodities broker at RJ O'Brien in
    "People are a little cautious now as they are not going to
have as much exposure to riskier assets like the S&P 500, and
that should help gold," Streible said.    
    Spot gold was up 1.5 percent at $1,317.80 an ounce at
4:10 p.m. EDT (2010 GMT), breaking above key technical
resistance at its 100-day moving average near $1,297. 
    U.S. gold futures for August delivery settled up
$17.10 an ounce at $1,316.90.
    Turnover was much heavier than usual with volume about 25
percent above its 30-day average, preliminary Reuters data
    Before the Malaysian jetliner news, precious metal prices
were higher on U.S. President Barack Obama's move to impose
sanctions on some of Russia's biggest companies for the first
time over Moscow's failure to curb violence in Ukraine. 
    The sanctions, the toughest yet imposed by the United
States, also helped send palladium to 13-1/2 year highs. The
metal is chiefly sourced from Russia.
    Palladium benefits as the new U.S. sanctions fueled further
buying from investors already expecting supply to struggle to
keep pace with demand this year.
    Spot palladium peaked at $887.90 an ounce and was
last up 1.2 percent at $881.25. It is the best performing of the
main precious metals this year, up about 24 percent so far.
    Spot platinum was up 1.4 percent at $1,497.90 an
ounce, while spot silver rose 2.1 percent to $21.11 an
4:10 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold AUG   1316.90  17.10   1.3  1298.10 1325.90  169,609
US Silver SEP  21.134  0.359   1.7   20.760  21.300   47,959
US Plat OCT   1503.70  18.00   1.2  1485.40 1509.00    9,882
US Pall SEP    885.10   8.35   1.0   874.70  890.00    6,348
Gold          1317.80  18.93   1.5  1297.70 1323.70         
Silver         21.110  0.440   2.1   20.740  21.220
Platinum      1497.90  20.00   1.4  1483.70 1502.50
Palladium      881.25  10.45   1.2   875.95  887.90
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        188,075   150,992   166,329     13.91    0.05
US Silver       50,238    65,786    54,770     18.66   -0.33
US Platinum      9,995    15,019    12,268      13.9   -2.85
US Palladium     6,668     4,461     5,842      18.2   -3.40

 (Additional reporting by A. Ananthalakshmi; Editing by Dale
Hudson, Jane Baird,Peter Galloway and Marguerita Choy)
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