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Gold futures climb to 7-day high as Greece default fears remain

Published 10/04/2011, 04:33 AM
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Investing.com – Gold futures were up for a fourth day on Tuesday, climbing to a seven-day high as ongoing fears over an imminent Greek debt default and sharp declines in global equity markets boosted the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,669.75 a troy ounce during late Asian trade, gaining 0.73%.    

It earlier rose by as much as 1.03% to trade at USD1,680.65 a troy ounce, the highest price since September 23.  

Mounting fears over an imminent Greek default remained after euro zone finance ministers delayed the approval of the next tranche of bailout funds for debt-laden Greece until October 17. 

According to reports, Greece needs the latest round of aid to avoid running out of money by mid-October.

Gold traders will pay close attention to a meeting of finance ministers from the single currency bloc later in the day to discuss the implementation of a permanent euro zone bailout facility. In addition, European Central Bank President Jean-Claude Trichet was to speak.

Also Tuesday, Federal Reserve Chairman Ben Bernanke is to testify on the U.S. economic outlook and recent monetary policy actions before the Joint Economic Committee in Washington.

Gold futures found further support as a sharp drop in global equities boosted the safe haven appeal of the precious metal. Asian markets tumbled, led by a 3.4% plunge in Hong Kong’s Hang Seng Index, while Germany’s DAX was down close to 3% shortly after the open.

Meanwhile, data from the International Monetary Fund released Monday showed that central bank’s in Thailand, Bolivia and Russia all added to their respective gold holdings last month, despite record high prices.

Thailand’s central bank purchased nearly 9.3 tonnes of gold in August, Bolivia added 7 tonnes, while Russia bought 5.6 tonnes to take its total holdings of the precious metal to 846.73 tonnes, the world’s fifth largest.

Elsewhere on the Comex, silver for December delivery rose 0.31% to trade at USD30.89 a troy ounce, while copper for December delivery tumbled 1.61% to trade at USD3.100 a pound.


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