Gold Price steadies on weak dollar, shares; investors watch Greece

London (Apr 22)  Gold steadied around $1,200 an ounce on Wednesday, as the dollar and European shares eased, while the absence of major developments in the Greek crisis left investors cautious.

Spot gold was unchanged at $1,202.60 an ounce by 0958 GMT, trading in a $7 an ounce range, the tightest for at least four months.

U.S. gold futures for June delivery fell $1.10 an ounce to $1,202.10.

"The trading range has become very tight over the past 10 days and sideways performance like that is drying up liquidity," Saxo Bank senior manager Ole Hansen said.

"If anything, in a day like this, with European markets down, I would be a cautious buyer looking for a potential bid on the back of the weaker dollar."

The dollar fell 0.5 percent versus a basket of major currencies, while European equities were pressured by negative company results.

Investors were monitoring the situation in Greece, which is quickly running out of cash. It pledged to its euro zone partners in February that by the end of April it would agree with creditors on a comprehensive list of reforms to get 7.2 billion euros remaining from its bailout.

But no package will be ready by Friday, when euro zone ministers are to meet in Riga, and it was also unlikely that one would be ready by the end of the month, according to a senior euro zone official.

Prolonged uncertainty over the debt crisis - which if unresolved could see Greece exiting the euro zone - could boost demand for bullion, seen as a safe haven, although the resulting strength in the dollar could limit gains.

"The (gold) market is growing tired of watching the Greek saga, while tensions in Yemen, an element of support to safe-haven bids, seem to have eased," Hansen said.

Saudi Arabia said on Tuesday it was ending air strikes against Houthi rebels in Yemen.

In a reflection of investor sentiment, SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.45 percent to 742.35 tonnes on Tuesday.

In the physical market, top bullion consumer India celebrated the gold-buying festival of Akshaya Tritiya on Tuesday. Gold purchases started slowly, despite a fall in local prices, as hard times in rural areas have hit demand and many buyers were holding back because they expected prices to fall even further.

Spot silver was up 0.4 percent at $16.06 an ounce. Platinum lost 0.4 percent to $1,143 an ounce and palladium fell 0.2 percent to $767 an ounce.

Source: Reuters