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Gold steady near 2-week high as Greece confidence vote eyed

Published 06/21/2011, 10:32 AM
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Investing.com – Gold futures were up for a third day on Tuesday, hovering close to Monday’s two-week high as a broadly weaker U.S. dollar boosted the appeal of the precious metal ahead of a key confidence vote in the Greek parliament later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,545.15 a troy ounce during U.S. morning trade, gaining 0.21%.              

It earlier rose to a daily high of USD1,546.15 a troy ounce, just below Monday’s two-week high of SD1,546.95.

The U.S. dollar weakened against the euro, slumping to a four-day low as concerns over a possible Greek default eased.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.41% to trade at 75.16.

Gold prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.

Meanwhile, markets awaited the outcome of a parliamentary vote of confidence in Greek Prime Minister George Papandreou’s newly appointed cabinet later in the day.

The confidence vote needed to pass in order for his government to secure support for new austerity measures and qualify for a second tranche of emergency loans from the European Union and International Monetary Fund.

Markets also began to focus on Wednesday’s Federal Reserve's policy setting meeting, which was to be followed with a press conference by Fed Chairman Ben Bernanke.

Mr. Bernanke was widely expected to reaffirm the bank’s pledge to hold interest rates near zero for an extended period, while investors will watch for clues regarding the current round of quantitative easing, which was due to end on June 30.

Elsewhere, silver for July delivery jumped 1.15% to trade at USD36.43 a troy ounce during U.S. morning trade, while copper for July delivery rose 1.1% to trade at USD4.119 a pound.

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