SINGAPORE (Reuters) - Gold gained more than 1 per cent on Monday on escalating geopolitical tensions as Ukraine mobilised for war after Russia bloodlessly seized Crimea, an isolated Black Sea peninsula where Moscow has a naval base.
The Group of Seven major industrialised nations condemned Russia's intrusion into Ukraine and cancelled preparations for the G8 summit, that includes Russia, scheduled for Sochi in June, the White House said.
Cash and US gold futures hit an intraday high around US$1,345 an ounce, with the United States threatening to isolate Russia economically in Moscow's biggest confrontation with the West since the Cold War. Crude oil, which often dictates gold, hit multi-month highs.
"I think there's short-term support for gold because of the turmoil. I am looking to find out whether it will break a previous high of US$1,361.60 touched in October last year," said Joyce Liu, investment analyst at Phillip Futures in Singapore.
"I think if that level is broken, it will greatly encourage more buyers to come into the market because there might be a potential reversal of trend. I will keep watching on gold prices and see if it will continue to rise and close that level."
Cash gold rose as high as US$1,344.80 an ounce on speculative buying driven by the turmoil in Ukraine and stood at US$1,342.45 an ounce by 10.44am Singapore time, up US$16.66.
It gained nearly 7 per cent in February, the biggest monthly rise since July, mostly due to worries over economic weakness in China and the United States, as well as political and economic turmoil in Ukraine.
US April gold futures, which often set the tone for cash gold, hit an intraday high of US$1,345 an ounce and later stood at US$1,342.60, up US$21.00.
Tensions in Ukraine pressured Asian stocks on Monday, forcing anxious investors to cut their exposure to riskier assets in favour of traditional safe haven bets such as the Japanese yen and Swiss franc.
The physical gold market got off to a slow start on Monday, with no signs of a pick up in demand from jewellers. Premiums for gold bars in Singapore were unchanged from last week at 80 cents an ounce to the spot London prices.
"I guess the critical level to watch to day is US$1,350 an ounce. I haven't seen any buying or selling so far, and it seems everybody is having a slow start," said a dealer in Singapore.
Output of gold in Australia, the world's No. 2 producer, rose to its highest in a decade in 2013 as richer ores were mined to combat weak bullion prices, a survey released on Sunday showed.
