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Gold futures steady at 3-week high in holiday-thinned trade

Published 05/30/2011, 09:31 AM
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Investing.com – Gold futures held steady at a three-week high in holiday-thinned trade on Monday, as lingering concerns over a Greek sovereign debt default boosted the safe haven appeal of the precious metal.   

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,538.35 a troy ounce during U.S. morning trade, easing up 0.07%.         

It earlier rose to USD1,538.85 a troy ounce, the highest price since May 4. Gold prices were less than 2.5% away from an all-time high of USD1,577.15 an ounce it hit on May 2.

The leader of Greece's main opposition party, Antonis Samaras rejected new austerity measures proposed by Greek Prime Minister George Papandreou on Friday, saying his party wouldn’t be blackmailed.

Riots spread throughout Athens on Sunday, as protesters denounced the government and the International Monetary Fund, amid talks that the debt-stricken nation may restructure its debt.

Meanwhile, the IMF, the European Union and the European Central Bank were expected to deliver a report on Greece’s progress on meeting fiscal targets under its bailout plan later in the week.

Germany’s Der Spiegel magazine said over the weekend that the review will find Greece has missed all its fiscal targets. However, the IMF said Sunday that the report was untrue.

Europe’s largest financial service provider BNP Paribas forecast gold prices would trend “moderately higher” for the rest of the year, averaging USD1,500 an ounce, before peaking at USD1,600 an ounce in 2012.

The lender said in a report that, “The pace of monetary tightening by central banks and the evolution of inflation expectations will be key factors that will drive prices higher over the coming months.”

Elsewhere, silver for July delivery added 0.22% to trade at USD38.07 a troy ounce during U.S. morning trade, while copper for July delivery dipped 0.47% to trade at USD4.161 a pound.

U.S. floor trading will be closed Monday for the Memorial Day holiday, while U.K. markets were to stay closed for the Spring Bank Holiday. Electronic trades will be booked with Tuesday’s transactions for settlement purposes.

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