February 13, 2012 / 3:10 AM / 8 years ago

PRECIOUS-Gold rises on Greek austerity bill, off 2-week low

* Gold to retest $1,698/oz-technicals        
 
    * Coming Up: Germany wholesale prices index for Jan; 0700
GMT

 (Adds details; updates prices)	
    By Lewa Pardomuan and Rujun Shen	
    SINGAPORE, Feb 13 (Reuters) - Gold strengthened on
Monday in line with gains in shares and the euro after Greece's
parliament finally approved a deeply unpopular austerity bill to
secure a second bailout from the European Union and the IMF to
avoid bankruptcy. 	
    Gold, typically a safe-haven asset, has been tracking the
fortunes of the euro and stocks in recent months, with
speculators selling the metal for cash to cover losses in other
markets as the euro zone debt crisis caused much turbulence in
financial markets.	
    The approval of the austerity bill by the Greek parliament
triggered serious violence in the streets of Athens and
elsewhere in the country, though Asian shares and the euro moved
higher in relief.   	
    The European Union plans to meet on Wednesday to discuss
giving a seal of approval for the new 130 billion-euro bailout.	
    "We are still looking for more measures out of Europe before
we see a sustainable risk rally. Yes, perhaps it's good that we
have a second bailout package and we are sure that at least we
are not going to see Greece defaulting," said Ong Yi Ling, an
analyst at Phillip Futures.	
     "I am looking for the resistance for gold at about $1,760.
That will be the first resistance and the second one is at about
the $1,800 level. For gold to break the $1,800 level, we need
more measures, I would say." 	
    U.S. gold for April delivery edged up 0.4 percent to
$1,732.20 an ounce.	
    Physical buying from China also helped lift gold 0.6
percent to $1,729.69 an ounce by 0724 GMT. 	
    Bullion fell to $1,703.69 on Friday, its lowest since late
January, as uncertainty over negotiations for Greece's bailout
package prompted investors to cash in.    	
    	
    	
    "The Chinese guys are still buying. Whenever there is a dip
in prices, they will buy. There's no change in their attitude,"
said a physical dealer in Hong Kong, who trades gold bars.	
    "They are still buying today, because I think the downside
is limited for the time being. Sentiment has improved a little
bit."	
    Analysts expect sentiment on gold to remain bullish in the
longer term, as central banks around the world are expected to
adopt further monetary easing measures to help offset the impact
from Europe's woes. This will raise the inflation outlook and
benefit gold, seen as a good hedge against rising prices.	
    In a sign of unwavering interest in gold, speculators raised
net long positions in U.S. gold and futures in the week ended
Feb. 7, pushing the net length in gold to a nearly
five-month high.	
    Spot platinum led the gains in precious metals with a
1.3-percent climb, building on six weeks of consecutive rise.
The gold-platinum spread hovered above $65.89, a 4-1/2-month low
hit in the previous session.	
    	
   Precious metals prices 0724 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1729.69   10.30   +0.60     10.61
  Spot Silver        33.83    0.27   +0.80     22.17
  Spot Platinum    1661.74   21.74   +1.33     19.29
  Spot Palladium    703.50    3.53   +0.50      7.82
  COMEX GOLD APR2  1732.20    6.90   +0.40     10.56        17430
  COMEX SILVER MAR2  33.84    0.24   +0.70     21.23         3980
  Euro/Dollar       1.3262
  Dollar/Yen         77.60
  COMEX gold and silver contracts show the most active months
 	
 (Editing by Sugita Katyal)
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