Bullion gains more than a percent

Malaysia Airlines crash in Ukraine revive demand

Bullion prices rallied on Thursday, 17 July 2014 as a Malaysia Airlines crashed in Ukraine near the Russian border revived haven demand.

Gold for August delivery rose $17.10, or 1.3%, to settle at $1,316.90 an ounce.

September silver tacked on 36 cents, or 1.7%, to $21.13 an ounce.

Gold is seeing keen safe-haven demand in the immediate aftermath of a Malaysian airliner with 295 people on board that crashed near the border of Ukraine and Russia. The uncertainty of the matter-whether it was shot down, terrorism, or mechanical malfunction or pilot error, spooked the market place. In overnight news, the U.S. and European Union have slapped new and tough sanctions on Russia. Asian and European stock markets were pressured a bit on this news.

There was still more downbeat economic data released from the European Union on Thursday. The bloc reported its construction spending fell 1.5% from April to May, but was up 3.5% from a year ago. The EU also reported its annual inflation rate remained at a very low 0.5% in June. The very low inflation and weak economic numbers in the EU have prompted the European Central Bank to inject monetary policy stimulus this summer, and more easing is likely on the way in the coming weeks.

In other news, reports say India gold imports rose by 65% in June, on an annual basis, despite no movement by the Indian government to relax gold import duties.

U.S. economic data released on Thursday included the weekly jobless claims report, new residential construction, and the Philadelphia Fed business survey. This data was collectively a bit downbeat, which also worked to modestly support the gold market.

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