2014.03.1704:48:10UTC+00Gold Surge to Six-Month High as Crimea Vote Increase Haven Demand

Gold spiked up to the topmost performing mark in more than six months, lengthening the longest weekly increase since August 2011, after a referendum in Crimea to leave Ukraine and join Russia increased demand for a store of value.

Bullion for immediate delivery rallied as much as 0.7 percent to $1,392.22 an ounce, the peak mark since September 9, and was at $1,386.87 at 7:49 a.m. in Singapore, up for a fifth day. The metal capped a sixth weekly climb last week, as holdings in exchange-traded goods expanded to the strongest this year.

Gold increased 15 percent this year as turmoil in Ukraine and slowing development in China, the biggest consumer, bolstered demand for a protection of wealth. Assets in bullion-backed ETPs hiked for a third week to 1,766.4 metric tons, the most since December 27, data gathered by Bloomberg show, after a record contraction last year. The metal bounced back from the largest yearly drop since 1981 even as the U.S. Federal Reserve, which next meets March 18-19, trimmed down asset purchases.

“Geopolitical tension has propelled gold higher, with CFTC and ETF positioning showing that investors have turned more positive on gold,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said from Shanghai. “Gold’s advance this week may be limited by the Fed, which is expected to continue to cut bond buying.”

Gold for April delivery boosted as much as 1 percent to $1,392.60 an ounce on the Comex in New York, the topmost intraday level for a most-active contract since September 9. The net-long position in gold rallied 4 percent to 123,007 futures and options in the week ended March 11, the most since December 2012, U.S. Commodity Futures Trading Commission data show. Short holdings sagged down 20 percent to 21,073, the weakest since October.