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Gold futures advance amid ongoing Greece fears

Published 06/28/2011, 10:32 AM
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Investing.com – Gold futures advanced on Tuesday, rising above the psychologically important USD1,500 an ounce level, as the safe haven appeal of the precious metal was boosted ahead of a key parliamentary vote on austerity measures in Greece on Wednesday.   

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,501.35 a troy ounce during U.S. morning trade, adding 0.26%.               

It earlier rose to a daily high of USD1,504.35 a troy ounce.

Riots erupted in Athens ahead of parliament’s vote Wednesday on the EUR28.4 billion, five-year austerity package. Approval is necessary to secure the release of additional bailout loans needed to avert a sovereign debt default. 

European Central Bank Executive Board member Juergen Stark said in an interview with German newspaper Die Welt on Tuesday that he did not expect the international community to finance Greece further after July if the country did not implement its austerity plan.

Meanwhile, the euro jumped to a four-day high against the U.S. dollar after ECB President Jean-Claude Trichet said the bank was in “strong vigilance mode,” pointing towards a possible interest rate hike next week.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.46% to trade at 75.44.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Elsewhere, silver for September delivery climbed 0.9% to trade at USD33.83 a troy ounce during, while copper for September delivery rose 0.4% to trade at USD4.105 a pound.

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