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Gold closes up more than 0.5%

Reported by AAP
Thursday, March 8, 2012
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Gold has ended higher, snapping a three-day losing streak, as signs of improvement surrounding the Greek debt deal and a weaker dollar gave gold a boost.

The most actively traded contract, for April delivery, rose $US11.80, or 0.7 per cent on Wednesday, to settle at $US1,683.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

With a day left to complete the transaction, more than 50 per cent of private-sector bond holders pledged to participate in the deal, up from 39.3 per cent earlier Wednesday.

While the Greek government needs 90 per cent participation to make the restructuring voluntary, without the deal Greece faces the prospect of a devastating and messy default.

"Today was a bit of sunshine on the Greek government and it was bullish for the euro," said Mike Daly, a gold broker with PFG Best Research.

Gold futures rallied on the Greek news, with gold for April delivery quickly adding $US10 a troy ounce on reports of the higher participation rate in the swap. Earlier in the day, gold had traded near flat as investors paused to consider the market outlook after three straight days of sharp losses.

"Everybody seems to like this," said Sterling Smith, analyst with Country Hedging.

"Granted we're not at the 75 per cent everybody was looking for, but seeing 50 per cent is better than the 39 per cent we saw earlier today and would have been quite dismal for the Greeks and added to their menu of problems."

A stronger euro also added to gold's allure. The euro recently traded at $US1.3137, up from $US1.3112 late Tuesday in New York.

"Gold is really shadowing the euro once again," said Graham Leighton, director of precious metals trading at Newedge in New York.

Gold futures are priced in US dollars and seem less expensive to investors who use foreign currencies like the euro when the greenback eases.

In other precious metals: May silver finished at $US33.585, up 80.2 US cents; April platinum ended at $US1,627.30, up $US15.40, while June palladium closed at $US685.35, up $US13.75.

23/10/2014 14:01Sydney, Australia. 23 October,2014
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