Investing.com - Gold futures eased higher in slow U.S afternoon trade Monday, but were off the highest levels of the session amid ongoing concerns over political turmoil in Greece and growing fears over the fiscal health of Spain.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,576.05 a troy ounce during U.S.afternoon trade, gaining 0.31%.
Price earlier climbed by 0.95% to trade at USD1,585.65 a troy ounce, the highest since May 22.
Gold futures were likely to find support at USD1,533.25 a troy ounce, the low from May 23 and near-term resistance at USD1,594.35, the high from May 22.
Gold prices took cues from the currency market, tracking movements in the euro. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The single currency found some support after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.24% to trade at 82.32.
On Friday, the index hit the highest level since September 2010.
Despite the day’s gains, gold futures remained vulnerable to further losses in the euro amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the bearish sentiment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year, up from 6.34% on Friday.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost its safe haven appeal to the U.S. dollar, U.S. Treasuries and German Bunds, partly as a strengthening greenback makes the yellow metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.19% to trade at USD28.33 a troy ounce, while copper for July delivery advanced 0.60% to trade at USD3.469 a pound.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day. Floor trading on the Comex will remain closed.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,576.05 a troy ounce during U.S.afternoon trade, gaining 0.31%.
Price earlier climbed by 0.95% to trade at USD1,585.65 a troy ounce, the highest since May 22.
Gold futures were likely to find support at USD1,533.25 a troy ounce, the low from May 23 and near-term resistance at USD1,594.35, the high from May 22.
Gold prices took cues from the currency market, tracking movements in the euro. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The single currency found some support after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.24% to trade at 82.32.
On Friday, the index hit the highest level since September 2010.
Despite the day’s gains, gold futures remained vulnerable to further losses in the euro amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the bearish sentiment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year, up from 6.34% on Friday.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost its safe haven appeal to the U.S. dollar, U.S. Treasuries and German Bunds, partly as a strengthening greenback makes the yellow metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.19% to trade at USD28.33 a troy ounce, while copper for July delivery advanced 0.60% to trade at USD3.469 a pound.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day. Floor trading on the Comex will remain closed.