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Gold futures extend gains on S&P Greek warning

Published 07/04/2011, 10:24 AM
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Investing.com – Gold futures extended gains in holiday-thinned trade on Monday, re-approaching the psychologically important USD1,500-an-ounce level, after ratings agency Standard & Poor’s warned that a plan to rollover Greek debt could amount to a default.
 
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,495.95 a troy ounce during European late afternoon trade, gaining 0.54%.               

It earlier rose as much as 0.66% to hit a daily high of USD1,497.05 a troy ounce. 

Trade was expected to be slim as the NYMEX floor trading was to remain closed for the U.S. Independence Day holiday.

Standard & Poor’s said earlier Monday that a proposed debt rollover plan for Greece may place the country in “selective default” under the ratings firm's criteria.

French lenders had recently proposed a plan to reinvest half of the proceeds from maturing Greek government bonds into new 30-year Greek bonds. The European Central Plan said that it supported the plan, as long as it was voluntary.

Over the weekend, euro zone finance ministers authorized a EUR12 billion tranche of bailout funds for Greece and said details of a second aid package for Athens would be finalized by mid-September.

Global financial service provider Commerzbank said in a report earlier that, "The debt crisis in Greece has eased somewhat for the time being, but that does not mean it is solved. The problem is still there - the EU and Greece have only gained some time."

The lender added that investors were “using the opportunity to get into gold at a cheap price after the sharp fall last Friday", when prices slumped to a six-week low amid receding concerns over Greece’s debt crisis.

Elsewhere, silver for September delivery climbed 0.63% to trade at USD34.11 a troy ounce during, while copper for September delivery shed 0.16% to trade at USD4.307 a pound.

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