Gold Prices Gain on Greece Debt Concerns

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Gold Prices Gain on Greece Debt Concerns

Gold prices advanced as a selloff in the major stock indexes in the world on Greece defaulting worries increased the demand for a haven.

Greece faces payments of more than $1.1 billion next month with Greek government bonds on course fo0r t6heir worst week since the aftermath of the January elections.

Gold futures for May delivery were up 0.41% to $1203 an ounce on the Comex division off the New York Mercantile Exchange aided by a weaker dollar.

The executive arm of the European Union expressed its displeasure with the pace of negotiations between Greece and her international creditors while the International Money Fund also expressed its dissatisfaction with the talks.

”Greece has moved back toward the front burner of the market place late this week,” Jim Wyckoff, an analyst at Kitco.com, told the Wall Street Journal.

“Gold is seeing some safe-haven demand.”

The comments by the two key lenders increased concerns that Greece would default from its loans and buoyed the dollar, a haven asset that many would expect to outperform others during times of turmoil.

Gold prices are more than 5% up0 from its March lows buoyed not only by concerns of Greece defaulting on its loans and exiting the European Union, but also by strong indications by the US Federal Reserve that it  was unlikely to raise the country’s lending rates until after the summer.

“Greece’s debt concerns are causing gold to stay right at $1,200, and it’s a driving factor of gold staying range-bound for now,” Phil Streible, a senior market strategist at RJO Futures in Chicago, told Bloomberg in a telephone interview. “I think the Fed will raise rates in the September meeting.”

Silver futures for May delivery slipped baout6b 0.3% to $16.299 an ounce while platinum for July delivery advanced 0.7% on the New York Mercantile Exchange.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com