* Gold falls as much as 0.7 pct before recovering
* Rebels declare victory in referendum on self-rule in
* Chinese premiums at $3 an ounce
By A. Ananthalakshmi
SINGAPORE, May 12 Gold recovered on Monday after
falling to its lowest in a week earlier in the session, boosted
by safe-haven demand from escalating geopolitical tensions in
Spot gold was little changed at $1,289.60 an ounce by
0655 GMT, after dropping to a one-week low of $1,279.60 earlier
on a softer euro.
The euro has lost more than 1 percent since Thursday when
the European Central Bank said it was ready to take action next
month should updated inflation forecasts merit it. A stronger
dollar in turn makes bullion more expensive for holders of other
In Ukraine, pro-Moscow rebels declared a resounding victory
in a referendum on self-rule for eastern Ukraine, with some
saying that meant independence and others eventual union with
Russia as fighting flared in a conflict increasingly out of
Gold is seen as a safe-haven investment at times of
political and economic uncertainty.
"Prices are treading water at the moment," said Victor
Thianpiriya, an analyst at ANZ, adding that developments in
Ukraine were probably not big enough to move gold prices
INTL FCStone analyst Edward Meir said investors seems to be
growing increasingly complacent about the crisis, "perhaps
figuring that the worst case scenarios were not materializing."
"The more the crisis remains localized, the more pressure
there will be on gold prices going forward," Meir said.
Meanwhile, subdued buying in the physical markets is also
hurting sentiment towards gold.
Friday data showed that gold imports in India, the
second-biggest consumer of bullion, fell 74 percent in April to
$1.76 billion from a year earlier due to import restrictions.
In top buyer China, local premiums over the global benchmark
have climbed to about $3 an ounce after trading at a discount
for most of the last two months on weak demand.
But they are still much lower than the over-$20 premiums
seen earlier in the year.
ANZ's Thianpiriya said unless premiums climbed to $7 or $8,
Chinese buying wouldn't have much impact on prices.
PRICES AT 0655 GMT
Metal Last Change Pct chg
Spot gold 1289.6 0.77 0.06
Spot silver 19.21 0.11 0.58
Spot platinum 1428.9 7.1 0.5
Spot palladium 802.25 4.65 0.58
Comex gold 1289.6 2 0.16
Comex silver 19.285 0.164 0.86
COMEX gold and silver contracts show the
most active months
(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and