Gold price steady
Gold rose to its highest in almost four weeks on Tuesday as lingering fears about a Greek debt default overshadowed a rebound in the euro, while silver was heading for its biggest monthly decline since 2008.
A Wall Street Journal report that Germany could make concessions on efforts to put together a bailout for Greece lifted the single currency, but analysts said Greece’s debt crisis deterred investors from searching out higher risk assets.
Spot gold added 89 cents to $1,538.84 an ounce by 3:10 a.m. British time hitting an intraday high around $1,540, its highest since May 4. Bullion is down 1.6 percent so far in May, hovering below a lifetime high around $1,575 touched in early in the month.
“It’s crucial for markets to see whether Greece is actually sustainable and whether it can actually obtain the next 12 billion euros that is required for them to meet their funding needs in July,” said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
“I think silver was going up too fast and within too short a period of time. But I think on a longer-term basis after the selloff, you see that investors are slowly coming back.”
Silver rose 22 cents to $38.27 an ounce, but the metal is down around 20 percent in May — its biggest monthly decline since 2008. Silver struck record at $49.51 an ounce in April.
The European Union is racing to draft a second bailout package for Greece to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.
Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, the Wall Street Journal reported, citing people familiar with the matter.
The euro rose to as high as $1.4354, its highest in three weeks because of the report, rising above its 55-day moving average at $1.4333.
The physical market lacked activity, but some speculators could be tempted to cash in on gold’s gains. Demand from top consumer India was likely to ease as the wedding season comes to an end.
Indian parents customarily give gold jewellery as gifts.
“It’s a very quiet start,” said a dealer in Singapore.
“But we saw two-way business yesterday. Thailand and Indonesia were sellers, while the Indians were the buyers. We also saw speculators buying silver.”
Source: Reuters