* Gold may rebound to $1,601.80-technicals
* Coming Up: EZ Industrial production yy Mar; 0900 GMT
By Lewa Pardomuan
SINGAPORE, May 14 Gold edged up on Monday as
bargain hunters lifted prices from four-month lows, but gains
were capped as an inconclusive Greek election raised the risk
the country could exit the euro zone and fanned fears of a
worsening debt crisis in the region.
Gold has moved in tandem with riskier assets this year as
the turmoil in Europe sent the euro to multi-month lows and
investors turned to the safety of the dollar, analysts said.
The U.S. dollar has also been supported by optimism that
more positive labour market numbers will be seen soon.
Gold hit an intraday high at $1,585.39 an ounce and
was barely changed at $1,578.45 by 0615 GMT. Bullion had tumbled
to a low of around $1,573 on Friday, its weakest since early
January, on fears that the debt crisis in Europe will hurt
global economic growth.
"I think for as long as the crisis in Europe drags on, it's
going to keep sentiment broadly in check. At the moment, gold
has been painted with the risk brush. It's going to be very much
a tracker of the equity markets," said Nick Trevethan, a senior
commodity strategist at ANZ in Singapore.
"The range should be from just below $1,580, up towards
$1,600. The market really needs to get back towards $1,600 or
above in order the confirm we have bottomed."
U.S. gold for June slipped $5.50 an ounce to
Money managers in gold futures and options cut their net
long positions by 20 percent to the lowest level since December
2008, as investors aggressively unwound their bullish bets in
the precious metal after a sharp price pullback.
Greece's president will continue talks with the country's
political leaders on Monday to try to form a government after an
inconclusive election left parliament divided between supporters
and opponents of the 130 billion euro EU/IMF bailout.
Investors had turned to gold as a safe haven during the
debt crisis last year, sending prices to an all-time high of
around $1,920 an ounce. But this year, gold is trading more in
line as a commodity that moves in the opposite direction to
the U.S. dollar.
The euro dipped to $1.2878 at one point on trading platform
EBS, its lowest level since Jan. 23, after Greek political
leaders failed in their latest efforts to form a ruling
The Nikkei inched higher on Monday as China's monetary
easing countered unease ahead of Greece's last-ditch attempt to
form a coalition government later in the day. Shares outside
In the physical market, jewellery makers and speculators
took advantage of last week's drop in prices.
"We've seen physical buying interest. But people are still
bearish about the market because of the strong dollar and
worries that Greece won't be able to solve its problems," said a
dealer in Hong Kong.
"Investors are not so aggressive, and I think the jeweller
sector is more important. Supply is a bit tight in the physical
Precious metals prices 0615 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1578.45 0.15 +0.01 0.94
Spot Silver 28.62 -0.23 -0.80 3.36
Spot Platinum 1461.44 1.44 +0.10 4.91
Spot Palladium 598.20 1.10 +0.18 -8.32
COMEX GOLD JUN2 1578.50 -5.50 -0.35 0.75 14667
COMEX SILVER JUL2 28.62 -0.28 -0.95 2.51 2875
COMEX gold and silver contracts show the most active months
(Editing by Himani Sarkar)