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Gold steady as market grows wary of Greece deal

Published 02/21/2012, 08:15 PM
Updated 02/21/2012, 08:17 PM
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Investing.com - Gold prices crept up in Wednesday trading as investors grew a little wary over a Greece bailout package, happy that it will prevent a March default altough it won't permanently remedy the debt-ridden Greek economy.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,758.65 a troy ounce, up 0.01%.     

Gold futures were likely to test support at USD1,732.35 a troy ounce, Tuesday's low, and resistance at USD1,761.85, Tuesday's high.

Markets applauded Europe's decision to free up EUR130 billion in rescue funding for Greece and rightfully so, as the move prevented the country from defaulting on its obligations in March and falling into a messy default that would have threatened the entire continent.

However, problems will arise anew, as the bailout stops the bleeding in Greece but doesn't fully treat the wound.

Furthermore, austerity measures such as layoffs, pension cuts and private-sector debt restructuring to which the country agreed in exchange for the aid will be tough to implement, and Greece isn't the only European country that is home to a shaky economy.

Such sentiment prompted investors to snap up positions in gold, a traditional hedge to paper currencies with cloudy horizons.

Elsewhere on the Comex, silver for March delivery was down 0.55% and trading at USD34.238 a troy ounce, while copper for March delivery was up 0.20% and trading at USD3.835 a pound.





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