Gold Price rebounds on dollar, platinum nears $1,000/oz on China worries
San Francisco (July 8) Gold rose on Wednesday as the dollar softened, yet prices remained not far from a four-month low hit earlier in the session as markets watched the tumble in Chinese stock markets and the unfolding Greek debt crisis.
Other precious metals logged sharp losses, with platinum approaching the $1,000 an ounce mark for the first time in more than six years.
Global financial markets have been rattled by the Greek crisis that could see Athens leave the euro zone. Adding to those jitters were concerns about Chinese growth and uncertainties related to the equity market correction.
"We saw a broad-based sell-off in metals - copper, iron ore, precious - and that is more closely related to China than Greece, with the suspension of equity trading on the Chinese stock exchange raising questions about the economy there," Julius Baer analyst Carsten Menke said.
Gold, usually seen as an alternative investment in times of financial and economic uncertainty, has failed to see significant retail buying from either of those factors, due to a generally robust dollar and prospects of higher U.S. interest rates. These would increase the opportunity cost of holding gold.
Spot gold was up 0.5 percent at $1,161.18 an ounce, after hitting $1,146.75, its lowest since March 18, in earlier trade. U.S. gold futures for August delivery were up $8.10 at $1,160.70 an ounce.
Traders will monitor the minutes of the Federal Reserve's June policy meet to be released on Wednesday, for clues on when the U.S central bank would begin to increase rates.
"It's looking likely that the Fed is going to push out their first interest rate hike beyond September, possibly to October, December or January next year," Mitsubishi Corp analyst Jonathan Butler said.
"Gold has not broken below $1,150 on daily closing basis, it would suggest there is some support there."
The dollar fell 0.5 percent against a basket of leading currencies.
In recent weeks, the U.S. currency had been boosted by weakness in the euro as uncertainty persisted over Greece's fate in the euro zone.
Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe's currency bloc and into economic ruin.
Silver was up 0.4 percent at $15.10, after a 4.4 percent tumble in the previous session, when it touched its lowest since December 2014. Palladium fell 3 percent to mid-2013 lows of $627.72 an ounce, before cutting losses to trade down 0.6 percent at $643.
Source: CNBC
