SINGAPORE: Gold climbed to trade near its highest in three weeks on Wednesday, helped by a weaker dollar and simmering tensions in Ukraine that triggered safe-haven bids.
Violence flared on Tuesday in the eastern Ukrainian port of Mariupol, where a spokesman for pro-Moscow militants told
Russia's Itar-Tass news agency that one person was killed and three wounded in an attack on a checkpoint.
Supporters of Russia and of a united Ukraine have been burying their dead as Ukraine slides further towards war, and accusing each other of tearing the country apart.
Spot gold rose 0.4 percent to $1,311.71 an ounce by 0344 GMT, after earlier hitting a session high of $1,313.50. It touched a 3-week high of $1,315.60 on Monday.
"The price trend is not very clear but because of the increased tensions in Ukraine, gold prices are supported," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "It could fall back as the situation eases."
"There is no physical demand. The physicals markets have been very quiet over the last couple of months."
Periods of economic and political uncertainty generally tend to burnish gold's appeal as a safe-haven investment.
The rising Ukraine tensions could also further worsen relations between Russia and the West, boosting gold. The Obama administration is working on another round of sanctions against Russia if it dramatically ramps up aggression against Ukraine.
Gold was also helped by a weaker US dollar, which was languishing at six-month lows against a basket of major currencies.
A lower greenback makes it cheaper for holders of other currency to buy gold.
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