Gold prices gain in Asia on safety as Greece vote 'No' on bailout terms

Investing.com - Gold rose in Asia on Monday as policy makers set the stage to react to any fallout from the Greek vote at the weekend rejected the bailout terms from international creditors.

Gold futures for August delivery on the Comex rose 0.36% at $1,172 a troy ounce as investors sought safety with the future of Greece's membership in the euro zone in doubt after the vote.

Elsewhere in metals trading, silver futures for September delivery gained 0.18% at $15.683 a troy ounce.

Copper for September delivery however plunged 0.78% to $2.597 a pound.

Asian policymakers in China and Japan and elsewhere braced for any fallout from the Greek 'No' vote at the weekend as Greece's Prime Minister, Alexis Tsipras said Sunday he wanted a quick deal with its creditors and to restore banking sector operations to avert a humanitarian crisis.

Tsipras said that the International Monetary Fund report, released Thursday, which said that the Greek debt was not sustainable, was proof that his government was right on the demand its restructuring.

Greece's Finance Minister, Yiannis Varoufakis, said Sunday that the 'No' vote in the referendum was the peoples' response to five years of austerity and added that creditors never had a real intention to cooperate.

"We had two requirements: to put an end to austerity and to restructure the debt," he said. "Unfortunately, the creditors refused any meaningful discussion and from the first moment planned to shut down our banks in order to impose their positions," he said to reporters.

"The Greek people today return this ultimatum back to the creditors. From tomorrow, with this No, we will extend a cooperation hand to our partners and call them one by one in order to reach common ground."

At the weekend, China announced the suspension of initial public offerings and corralled its leading brokerages to establish a RMB120 billion fund to support the country's battered stock market amid a flurry of weekend activity aimed at arresting the market's slide at the Monday open.

While the move is not a direct response to Greece, the move follows a near-30% plunge in the value of shares traded in Shanghai since its recent peak, including a 12% drop last week. Beijing has stepped up its interventions in the market after last weekend's rate and reserve cuts from the People's Bank of China failed to lift market sentiment and put a floor under prices.

Last week, gold stabilized on Friday, recovering from three-and-a-half month lows as the dollar slid lower in holiday thinned trade and investors remained wary ahead of a critical weekend referendum in Greece.

U.S. markets remained closed on Friday for the Independence Day holiday.

Gold firmed up as the dollar slid lower after disappointing U.S. jobs data tempered expectations for higher interest rates later this year.

The Labor Department reported Thursday that the U.S. economy added 223,000 jobs in June, compared to expectations for jobs growth of 230,000.

Hourly earnings were flat in June, missing expectations for growth of 0.2%.

The Federal Reserve has said that continued strengthening in the labor market is a key factor in deciding when to start hiking interest rates.

Rising interest rates would weigh on gold prices, because the precious metal doesn't yield interest, while boosting the dollar, in which it is priced.

In the week ahead, investors will be await the minutes of the Fed’s June meeting.

On Monday, Germany is to release data on factory orders. Switzerland is to publish a report on consumer inflation. Canada is to publish a report on the Ivey business index. In the U.S., the Institute of Supply Management is to release data on service sector activity.