LONDON (SHARECAST) - Demand for the low-risk investment that is gold waned as a whole day passed without a European country having the rating for its sovereign debt downgraded.
Gold for June delivery retreated from a four-month high to close $3 lower on the Comex division of the New York Mercantile Exchange at $1,168.80 an ounce, though this was some $6 above its low for the day.
Optimistic noises about the rescue package for Greece also undermined the appeal of the yellow stuff.
European Union Commissioner for Economic and Monetary Affairs, Olli Rehn, said that an aid package for Greece will emerge “in the next days”.
“I cannot provide you with details today as we are about to conclude talks,” Rehn told reporters in Brussels, adding that the package will be a “multi-annual program that will lead to a major fiscal and also structural adjustment.”
The “financial support will give Greece sufficient breathing space from pressures of financial markets to decisively restore the sustainability of its public finances and to put the economy back on the path of growth,” he said.
“I want to underline that this is done not only because of Greece but for every euro member state and its citizens to safeguard financial stability in Europe and globally.”
As gold declined so most other metals went the other way. Silver for May delivery advanced 44 cents to $18.55 an ounce while palladium and platinum prices also moved northwards.
Copper prices dipped however after Chile announced an increase in its copper production. The world’s largest copper producer mined 451,127 tons of copper in March, 5% higher than a year earlier.
Oil prices moved above $85, buoyed by the improved sentiment towards Greece.
Crude for June delivery rose $1.95 to $85.17 a barrel in New York.
Encouraging US jobless figures lent support to the oil price. Initial claims for unemployment fell to 448,000 last week, the second decline in a row, according to latest Labor Department figures. That was down 11,000 on the previous week and the lowest number for four weeks. Analysts had pencilled in a figure of 442,000.
