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Gold hits 3-week high on Iraq, platinum group metals up

June 16, 2014

Gold hit its highest in nearly three weeks on Monday, as turmoil in Iraq supported the metal's safe-haven appeal, while platinum group metals gained ahead of the outcome of wage talks to end a five-month long strike in South African mines, Reuters said.

Spot gold rose 0.5 percent to $1,282.50 an ounce by0632 GMT, after hitting $1,283.70 earlier in the session - the highest since late May. Sunni insurgents seized a mainly ethnic Turkmen city in north western Iraq on Sunday after heavy fighting, solidifying their grip on the north after a lightning offensive that threatens to dismember Iraq.

Gold is seen as a safe-haven asset at times of geopolitical uncertainty. "Gold is expected to climb this week as the situation in Iraq remains volatile," said Howie Lee, an analyst with Phillip Futures.

"At its current level of $1,282, gold appears to have plenty of upside before facing heavy resistance," Lee said, adding that immediate resistance is expected at $1,292.

Data from the Commodity Futures Trading Commission on Friday showed that investor sentiment towards gold was turning positive. Hedge funds and money managers increased their bullish bets in gold futures and options in the week to June 10, their first increase in five weeks.

Other traders warned that this week's Federal Reserve policy meeting could bring caution to any rally in gold. The Fed will conclude a policy meeting on Wednesday, with markets watching out for any signals on when the U.S. central bank might begin hiking interest rates.

Among other precious metals, platinum and palladium gained about 1 percent each on Monday after logging sharp declines last week on easing supply worries. The leader of South Africa's AMCU union said on Friday awage deal with the top three platinum producers was imminent,signalling a possible end to a crippling five-month strike that has disrupted global output of the metal.

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Source: AKIpress News Agency (Kyrgyz Republic)

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