Los Angeles CA, July 1 (Tangible Investments) - by James O’Dell - Gold rallied to a ten week high on Monday, climbing $12.00 or 0.91 percent to close at $1,327.25 an ounce while posting its first back-to-back quarterly gains since 2011 as rising geopolitical tensions in the Middle East coupled with the end of the ceasefire in Ukraine will continue to underpin the yellow metal. Silver added $0.09 or 0.43 percent to close at $21.03 an ounce, while the Gold/Silver ratio edged higher to 63.11.
"If we can hold $1,321 today and close above $1,331 I think it could open the road towards a test of $1,370 - a weaker dollar, the end of the ceasefire in Ukraine, tensions in Israel and rising ETF holdings have all provided some support," said Saxo Bank's Ole Hansen. Improving sentiment towards Gold is being reflected in the biggest one day inflow (5.7 tons) into the world's largest Gold exchange traded fund (ETF) since March 10.
Monday took on added technical significance, after Gold posted a bullish monthly high close on the last trading day of the month, the quarter and the first half of 2014. With Gold up more than 10 percent so far in 2014, it continues to be one of the top performing assets of the first half. "Gold's strength over the past 24 hours could partly be explained by chunky ETF buying yesterday," says Swiss bank UBS in a note on Tuesday.
Meanwhile, in Ukraine, President Petro Poroshenko refused to renew the ceasefire on Tuesday, as Ukrainian government forces began launching air and artillery attacks against pro-Russian separatists in the eastern portion of the country. In Iraq, Prime Minister Nouri al-Maliki is under pressure to resign, as the Parliament meets amid accusations by Sunnis and Kurds that the current PM broke his promise of an inclusive government, igniting the current crisis.
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