Sunday 21 October 2018

Gold rebounds, but set for 4th weekly drop

LONDON, February 20, 2015

Gold rebounded and world shares weakened on Friday before a meeting of euro zone finance ministers that could put Greece on its way to exiting the bloc, but prices were still headed for their fourth straight weekly drop.

Spot gold, lower initially, rose 0.4 per cent at $1,211.90 an ounce by 1243 GMT. The metal has lost 1.6 per cent so far this week, dipping to its lowest in six weeks at $1,197.56 on Wednesday, when hopes for a successful resolution to Greece's debt talks boosted investor appetite for risk.

US gold futures for April delivery were up $3.90 an ounce to $1,211.50 on the day.

"Germany rejected the Greek proposal ... the market has had just a tiny knee-jerk reaction to that," NRC Commodities analyst Andrey Kryuchenkov said.

"But the dollar is still king and we are likely to sit in this range between $1,180 and $1,240 for a while."

The dollar firmed after upbeat US jobless claims data, while the euro dipped after a report on German news magazine Spiegel that European Central Bank officials are preparing for a departure of Greece from the euro zone.

Investors were waiting for the outcome of Greece's debt talks, scheduled to start at 1530 GMT in Brussels.

On Thursday, Germany rejected Athens' proposal for an extension to its loan agreement.Berlin stance set the scene for tough talks at the crucial meeting.

Traders were set to focus on the US Federal Reserve and its monetary policy for clues on a possible interest rates hike by June, despite caution evident in the minutes from the latest Fed policy meeting.

Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the US economy, could hurt demand for non-interest-bearing bullion.

Liquidity was thin in Asia as No 2 consumer China and several other Asian countries were shut for the Lunar New Year holiday.

Gold prices had received some support from Chinese buying ahead of the holiday, when gold is bought for gift-giving.

"A lot hinges on the return of China next Wednesday as many participants are expecting them to be on the bid following their New Year festivities," MKS Group said in a note.

"If this fails to be the case, the complex would likely continue its slide lower."

Silver rose 0.9 per cent to $16.47 an ounce, while platinum dropped 0.2 per cent to $1,164.24 an ounce, after reaching a 5-1/2-year low at $1,151.50 earlier. Palladium fell 0.4 per cent to $781.00 an ounce. - Reuters

Tags: Gold | Talks | drop | rebound | Greek | weekly |


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