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Gold rally flags as physical demand wanes

Published: 16:31 29 Aug 2014 BST

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Gold eased back a fraction on Friday as demand for physical metal tailed off.

The spot price was off 54 cents at US$1,289.01 in afternoon trading, though the December contract was trading 20 cents higher at US$1,290.60 on the COMEX division of the New York Mercantile Exchange.

The yellow metal has had a good run this week so some slackening of demand was to be expected, though concerns over events in Ukraine helped offset the weakness.

Reports indicate separatists are making progress in clashes with government forces in eastern Ukraine.

In London, the morning gold fix put the price of gold at US$1,285.75, compared to US$1,

The picture in the silver market was a little brighter with the spot price up 3 cents at US$19.54 and the December futures contract up 2 cents at US$19.63.

Meanwhile, the price of palladium rose to a 13-year high on the back of supply concerns should the West impose further sanctions on Russia, the world’s biggest producer.

Heavier sanctions are almost certain to lead to tit-for-tat reprisals, thus putting supplies of palladium at risk.

In afternoon trading, palladium was trading hands at US$905.15 an ounce, up US$8.68 on the day.

Major movers

GoldStone Resources -11%
Pan African Resources -5%
Oxus Gold -4%

Sylvania Platinum +17%
Petropavlovsk +16%
Touchstone Gold +12%

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