Gold price spikes after plane crash in Ukraine

NEW YORK - Gold prices rose and the market's fear gauge spiked Thursday after a civilian aircraft crashed in Ukraine near the Russian border.

Gold futures were up nearly 2% to about $1,320 per ounce as investors sought safety in so-called hard assets.

The VIX, which measures volatility and is sometimes dubbed the "Fear Gauge", shot up as much as 17% following a report by a Russian news service that a Malaysian Airlines flight from Amsterdam to Kuala Lumpur had crashed in eastern Ukraine.

Malaysian Airlines confirmed on Twitter that it had lost contact with MH17, and the flight's last known position was over Ukrainian airspace. Ukraine's president acknowledged that the crash occurred, while other officials in Kiev told CNN that Russian forces were likely to blame.

European markets dropped sharply on the news, which came just before the closing bell. Germany's DAX lost more than 1%. The SPDR S&P Russia ETF, which tracks the Russian market, is down nearly 6%.

The latest development comes one day after the White House imposed new sanctions in response to Russian aggression in Ukraine.

Russian President Vladimir Putin accused the United States of pushing the Ukrainian authorities toward a continued conflict, whereas Russia wants to see an immediate end to hostilities and a negotiated solution involving all sides.

Tensions have been high between Ukraine and Russia since street protests forced former pro-Moscow President Viktor Yanukovych from power in February. Russia subsequently annexed Ukraine's southeastern Crimea region and a pro-Russia separatist rebellion has been raging in Ukraine's eastern Luhansk and Donetsk regions.

Ukrainian forces have been struggling to quell the separatist unrest. Ukraine's government has accused Russia of allowing weapons and military equipment, including tanks, to cross the border illegally into the hands of pro-Russia separatists.

The Pentagon said Wednesday that Russia now had 12,000 troops on the border with Ukraine, as well as some heavy weapons. The troop numbers had fallen to about 1,000 previously from a high of an estimated 40,000 forces earlier this year.

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