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Gold halts declines from European-fueled dollar gains

Published 05/08/2012, 08:09 PM
Updated 05/08/2012, 08:13 PM
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Investing.com - Gold prices were steady in Asian trading on Wednesday, easing up on losses sustained when investors stocked up on dollars on fears Greece's political uncertainty could disrupt the flow of bailout money into the country.

The dollar and gold normally trade inversely from one another.
 
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.01% at USD1,604.65 a troy ounce.

Gold traded at a low of USD1,603.25 a troy ounce and hit a high of USD1,607.05 a troy ounce during the session.

The precious metal sought to test support at USD1,595.75 a troy ounce, the low of May 8, and resistance at USD1,642.95, the high on May 7.

The dollar, gold's traditional hedge, has remained the asset of choice among investors seeking safe haven in recent sessions thanks to growing political uncertainty across Europe.

In Greece, the country's leading political parties failed to secure 50% of the votes in parliamentary elections over the weekend, and the current patchwork of parties remains unable to agree on a coalition government, with worries building that new elections will have to take place.

Greece is scheduled to receive a shot of bailout money in June yet talk among many in power that the country has had enough of austerity measures attached to bailout money is fueling fears that political parties will not have agreed on a new government by the time the rescue funding is scheduled to flow into country coffers.

Some fear widespread anger over austerity may even prompt Greece to abandon the euro outright, which would roil currency markets worldwide.

In France, incoming President Francois Hollande, a socialist, has prioritized growth over cutting spending, and markets remain worried France will clash with Germany over the continent's fiscal direction, ending cozier relations between the two countries under French President Nicolas Sarkozy's term.

Elsewhere on the Comex, silver for July delivery was down 0.18% and trading at USD29.405 a troy ounce, while copper for July delivery was down 0.17% and trading at USD3.682 a pound.







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