Gold rebounds as dollar dips, focus on Greek vote

04 Jul, 2015 2:40 pm

LONDON – Gold prices firmed on Friday, rebounding from a 3-1/2 month low as the dollar softened, while investors remained cautious ahead of Greece’s referendum on an international bailout deal.

Liquidity was thinner, with U.S. markets closed for the Independence Day public holiday.

Spot gold was up 0.2 percent at $1,167.70 an ounce by 1412 GMT. It had dropped to $1,156.85 — its lowest since mid-March — ahead of Thursday’s U.S. non-farm payroll data but pared losses as the dollar fell against a basket of currencies after the data showed jobs growth was weaker than expected last month.

“Judging from how gold fell ahead of yesterday’s U.S. data, the bias in the gold market is clearly to the bearish side,” Julius Baer analyst Carsten Menke said.

Before the data there had been strong expectations that the Fed would raise rates for the first time in nearly a decade in September, given recent strong numbers on consumer spending and housing.

Gold has been under pressure this year from uncertainty over the timing of any rate increase, which could boost the dollar further and dent demand for non-interest-paying bullion.

The metal was still heading for a 0.5 percent fall on the week, adding to the previous week’s 2 percent loss, mostly as a result of gains in the dollar against the euro as the Greek debt crisis unfolded.


Uncertainty around Greece has failed so far to trigger strong retail demand for gold, often perceived as a safe-haven asset.

“It’s not only about the outcome of the referendum, but also about the reaction of the European Central Bank, which could cut the credit levels of its funding to Greece,” Commerzbank analyst Carsten Fritsch said. “That could trigger some buying on gold.”

The Greek government has called the referendum on Sunday after five months of acrimonious talks with its creditors broke down without an aid-for-reforms deal.

Silver fell 0.1 percent to $15.67 an ounce, while platinum dropped 0.4 percent to $1,076.75 and palladium lost 1.9 percent to $679.10. – Reuters




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