Though bullion rose past the psychological value of $1,300 per troy ounce, prospects are shaky for the yellowish metal's near-term performance. Silver futures also rose in value during the Tuesday trade session.
The precious metals fell into demand as news reports broke about pro-Russia demonstrations manifesting in the Ukraine city Donetsk. Russia successfully annexed the Crimea region of Ukraine last month after the leader of Ukraine was ousted in February.
"The yellow metal is getting a boost from some safe-haven buying interest and by solid losses in the U.S. dollar index," states emailed remarks authored by senior analyst Jim Wyckoff with Kitco.com, according to the news source. "The Russia-Ukraine matter is back on the front burner of the marketplace Tuesday."
At 10:09 a.m. on Tuesday, gold futures rose 0.94 percent, a $12.22 increase to $1,309.22 per troy ounce. Silver futures gained 1 percent, a 20-cent lift to $20.07 per troy ounce.
Unrest in Ukraine benefits gold
The protestors in Donetsk have vowed to conduct a referendum about seceding from Kiev after having declared their independence.
The foreign ministry of Russia said on Tuesday that Ukraine's use of force against those protestors could do its part to sink the region into a civil war.
Separatists have taken control over government buildings in three municipalities in the eastern region of Ukraine.
Fed issues to spur gold
The yellowish metal also is likely to be impacted by the minutes of the March policy meeting of the U.S. Federal Reserve, MarketWatch reports.
Slated to be released on Wednesday, the minutes are likely to include suggestions and indications about what is in store for the Fed regarding its policy on economy-spurring stimulus measures. Further, the issue of borrowing costs also is one of which analysts and investors are keeping abreast.
"Recently, Fed members James Bullard and Dennis Lockhart suggested interest rates in the U.S. could increase in the 2015," David Madden with IG told the news source. "If we hear a similar hawkish sentiment on Wednesday, we could see gold head towards the 100-day moving average of $1,279."
Reuters reports gold futures have increased about 2.7 percent since touching their lowest value in seven weeks late last month.
The central bank of Iraq said it may move forward and continue purchasing the precious metal. The Middle Eastern nation acquired about 60 tons of bullion during the past 60 days.
The dollar was dipping on Tuesday against two key rivals, which also benefited the price of gold.
"The euro and the yen are strong against the dollar today and that is giving a boost to the gold price," senior vice president Bernard Sin with MKS SA told Reuters on Tuesday. "In a scenario of heightened tensions in Ukraine, you have people who want to hedge against that risk. But I don't think that gold is going to run away because physical demand is not there to provide a further extension."
A bearish view
But despite the recent uptick of gold, one investment house is proceeding with caution regarding the yellowish metal, Bloomberg reports.
Morgan Stanley is bearish on the metal that endured its first annual loss in 12 years in 2013. The losses were largely linked with the U.S. Federal Reserve suggesting it would taper and ultimately close monetary stimulus measures.
"As many of the factors that supported prices in the first quarter dissipate, we believe the gold price is set to resume a declining trend," states a note penned by analyst Joel Crane, according to Bloomberg.
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