Investing.com - Gold futures advanced during European morning trade on Monday, rising to a four-day high as market participants took cues from the currency market amid ongoing concerns over the euro zone’s debt woes.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,583.15 a troy ounce during early European trade, gaining 0.76%.
It earlier rose by as much as 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 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 0.65% to trade at 81.99. On Friday, the index hit the highest level since September 2010.
Despite the relief rally, the single currency remained vulnerable to further losses 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 gloomy environment, 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.
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 dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.9% to trade at USD28.63 a troy ounce, while copper for July delivery jumped 1.2% to trade at USD3.490 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,583.15 a troy ounce during early European trade, gaining 0.76%.
It earlier rose by as much as 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 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 0.65% to trade at 81.99. On Friday, the index hit the highest level since September 2010.
Despite the relief rally, the single currency remained vulnerable to further losses 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 gloomy environment, 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.
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 dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 0.9% to trade at USD28.63 a troy ounce, while copper for July delivery jumped 1.2% to trade at USD3.490 a pound.