Gold inched up on Wednesday, extending its recovery from a two-week low hit earlier this week as positive earnings results underlined demand for the precious metal, while palladium climbed to a fresh two-year high.
Investors took to heart the overall profit recovery in U.S. companies such as IBM (IBM.N: Quote) and Apple (AAPL.O: Quote), shifting their attention away from concerns over fraud charges against Goldman Sachs, a major commodities trader, and Greece's financial situation.
Spot gold XAU= edged up 0.2 percent to $1,142.25 an ounce by 0349 GMT from New York's notional close of $1,139.50. It hit a two-week low of $1,123.15 on Monday.
"Precious metals look to have already taken in stride the Goldman shock. Some say it was a one-day shock and that it's over, but I'm more cautious," said Yuki Sonoda, adviser at Japanese commodity brokerage Daiichi Commodities Co.
"Thanks to buoyant earnings from U.S. companies including IBM, precious metals are weathering concerns over Goldman as well as Greece. But the two issues still remain as they are, and things could get volatile."
Ten days of talks on an EU/IMF bailout package aimed at rescuing Greece from a debt crisis rocking the euro zone will begin on Wednesday. Greek borrowing costs hit a 12-year high ahead of the talks on Tuesday.
Earlier this month, Euro zone leaders agreed a giant EU/IMF aid package for Greece, and the details are carefully awaited.
In the currency market, the yen was on the defensive as investors added to long positions in growth-linked currencies, buoyed by strong U.S. corporate earnings, while the euro struggled with mounting worries about debt-laden Greece.
U.S. gold futures for June delivery GCM0 advanced to $1,142.60 an ounce, after settling at $1,139.20 on the COMEX division of the New York Mercantile Exchange.
Among other precious metals, spot palladium XPD= hit a new two-year high of $551.75 an ounce, exceeding the previous high marked on Tuesday.
The metal stood at $551.25, up 0.4 percent from $549 in New York. It is partly supported by exchange-traded fund demand, particularly from the United States.
Spot platinum XPT= gained 0.4 percent to $1,720.50 an ounce from $1,714 in New York. Palladium and platinum, both used to clean auto emissions and in jewellery, have been in favour as they are considered to be more sensitive than gold to economic recovery.
The holdings by the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust (GLD: Quote), stayed unchanged for the eighth business day in a row on Tuesday.
The fund said its holdings stood at 1,141.041 tonnes as of April 20, unchanged from the previous business day and the same as a record first marked on April 9. [GOL/SPDR]
In other markets, oil prices CLc1 rose on Tuesday after three sessions of losses as the threat from Iceland's volcanic ash cloud receded, letting some European flights resume, and U.S. stocks edged higher on quarterly results. [O/R]
