2014.04.2315:02:00UTC+00Gold Ends Higher On Safe Haven Appeal

Gold futures snapped a three-day loss to end higher on Wednesday, as investors sought the safe haven appeal of the precious metal with rising tensions in Ukraine and some weak U.S. existing home sales in March, while global equity markets declined.

In the ongoing conflict in Ukraine, Russian Foreign Minister Sergei Lavrov warned Wednesday that his country would retaliate strongly if its "interests" in Ukraine are attacked. He came down hard on the Ukrainian administration for restarting its anti-terrorist operation in the east of the country a day earlier.

In some tough talk, Lavrov told Russia Today, "If our interests, our legitimate interests, the interests of Russians have been attacked directly, like they were in South Ossetia for example, I do not see any other way but to respond in full accordance with international law,".

In economic news from the U.S., a Commerce Department report showed new home sales in the U.S. to have substantially decreased unexpectedly in March, with sales falling to their lowest level in eight months.

Gold for June delivery, the most actively traded contract, gained $3.50 or 0.3 percent to close at $1,284.60 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for April delivery scaled an intraday high of $1,289.10 and a low of $1,280.80 an ounce.

On Tuesday, gold futures for June ended lower for a third straight session, after falling to $1,277.60 an ounce, the lowest level since February 11.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped to 792.14 tons on Wednesday from its previous close of 794.14 tons on Tuesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.85 on Wednesday, down from its previous close of 79.89 late Tuesday in North American trade. The dollar scaled a high of 79.92 intraday and a low of 79.70.

The euro traded higher against the dollar at $1.3815 on Wednesday, as compared to its previous close of $1.3806 late Tuesday in North America. The euro scaled a high of $1.3854 intraday and a low of $1.3802.

In economic news from the U.S., a Commerce Department report showed new home sales in the U.S. plunged 14.5 percent to an annual rate of 384,000 in March from the revised February rate of 449,000. The steep drop came as a surprise to economists, who had expected new home sales to climb to a rate of 455,000 from the 440,000 originally reported for the previous month.

Meanwhile, the flash Markit Economics purchasing managers' index for the United States in April dropped to 55.4 from 55.5 in March. A readings over 50 indicate growth. New orders and exports rose, while employment was a tad weaker but in positive territory. Production in April rose at its fastest pace since March 2011.

Eurozone private sector started the second quarter on a solid footing with activity growth the fastest in nearly three years in April, but firms continued to slash prices, fueling fears that deflationary pressures are intensifying. The Markit Economics purchasing managers composite output index for eurozone rose to 54.0 in April from 53.1 in March, data showed Wednesday. The improvement was unexpected as economists had forecast a drop to 53. The latest reading was the highest since May 2011.