Gold slips as US dollar rebounds, investors eye Greece developments

New York (Dec 29)  Gold prices have fallen, but investors are keeping an eye on developments in Greece, wary of political uncertainty that could cause a spike in demand for the precious metal.  Gold for February delivery, the most actively traded contract, closed down 1.1 per cent at $US1,181.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

Trading was thin, with many market participants out for the year-end holidays. A rebound in the dollar pressured gold and other metals, which are priced in the US currency and become more expensive to foreign buyers as the dollar climbs.

The WSJ Dollar Index, which gauges the dollar against a basket of major currencies, was recently up 0.4 per cent at 83.05.

In Greece, a parliamentary vote failed to elect a president, paving the way for snap elections that could yield power to anti austerity parties and threaten the country’s bailout program.

European stock markets fell on the news, which reignited concerns of instability in the euro zone. Gold tends to benefit in times of political and economic uncertainty, as some investors believe it will hold its value better than other assets.

“There’s not enough nervousness yet for people to start seeking gold as a safe haven, but they are watching,” said Peter Hug, director of trading at Kitco Metals. “Right now, gold can easily move $US15 in either direction because the market is so thin.”

Source: TheAustralian.news