Gold prices lift on short-covering

New York (Feb 13)  Gold prices were up in Europe on Friday, helped by a wave of short-covering by traders and some enduring concerns over Greek debt negotiations.

Spot gold was trading at $US1,227.64 a troy ounce, up 0.5 per cent, in morning European trade.

The yellow metal rose "as shorters [engaged] in short-covering to lock in profits from gold's decline" ahead of the Chinese Lunar New Year next week when many traders will be on vacation, Phillip Futures investment analyst Howie Lee said.

Gold prices are also being nudged up by the metal's traditional role as a safe haven due to the stand-off between Athens and its creditors. Although some positive steps have been taken to resolve the issue there are still risks over the agreement of a debt deal between eurozone members over Greece.

"Gold should remain in solid demand thanks to the ongoing uncertainty in this context," Commerzbank said.

However, some analysts still see the bears closing in on the yellow metal further down the road.

"Post-Chinese New Year when the dust has settled, we could see gold taking a tumble again. Tensions over Ukraine have abated and a hopeful easing of Greek debt uncertainties may lift the safe-haven support for the precious metal," Mr Lee said.

The other precious metals were all higher. Silver was up 0.4 per cent at $US16.899 an ounce, platinum was up 0.5 per cent at $US1,201.00 an ounce, and palladium was up 0.7 per cent at $US777.10 an ounce.

Source: HeraldSun