BLBG: Gold Trades Near Five-Month High After Greece Bailout Agreed
By Glenys Sim and Gavin Evans
May 3 (Bloomberg) -- Gold, trading near a five-month high, may drop as the dollar advanced on concern a 110 billion euro ($146 billion) rescue package for Greece won’t contain the region’s debt crisis.
Bullion for immediate delivery traded at $1,178.55 an ounce at 5:20 p.m. in Singapore after declining as much as 0.2 percent. The metal advanced to $1,181.73 on April 30, the highest level since Dec. 4. Gold reached a record $1,226.56 on Dec. 3.
“We might see a bit of consolidation,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. in Sydney. Gold may have “the odd little bit of reversal,” he said. The dollar climbed for the first time in three days, adding as much as 0.5 percent against a basket of six currencies on concern the European Union will struggle to win agreement from members on the Greek aid package. EU leaders meet on May 7 to discuss the timeline of parliamentary approval.
Gold may track a drop in equities after Australia unveiled plans to impose the world’s heaviest tax regime on mining companies. Shares of BHP Billiton Ltd. and Rio Tinto Group declined in Sydney on concern that the so-called super tax will reduce profits by billions of dollars.
“Quite often, when we start to see uncertainties in the market, you get contagion across all markets, then you do sometimes see short-term selling,” said Heathcote. Australia’s S&P/ASX 200 Index dropped as much as 1.1 percent before ending 0.5 percent lower.
The precious metal is up 7.4 percent this year as “it seems to be benefitting at the moment from almost anything,” Heathcote said. The commodity “benefits when we get a stronger euro, risk is on and everyone’s diversifying. On the other hand, when things look a bit unstable, we get safe-haven buying.”
Platinum for immediate delivery was little changed at $1,734.50 an ounce and palladium shed 0.7 percent to $544.50 an ounce. Silver fell 0.1 percent to $18.6250 an ounce after jumping to $18.7645 on April 30, the highest price since Jan. 20.
To contact the reporters on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net; Glenys Sim in Singapore at Gsim4@bloomberg.net;
