Gold may advance on concern that the Greek government, after winning a vote of confidence, will struggle to pass austerity measures needed to avoid default on its debt. Gold for immediate delivery gained as much as 0.3 percent to $1,550.93 an ounce, the highest since June 6, before trading little changed at $1,546.20 an ounce at 11:09 a.m. in Mumbai. The August-delivery contract was also little changed at $1,547 an ounce. Greek Prime Minister George Papandreou won support from 155 out of 300 lawmakers. The ballot cleared the way for a separate vote on a 78 billion-euro ($112 billion) package of budget cuts and asset sales to ensure the payment of 12 billion euros due in July under last year’s 110 billion-euro bailout from the European Union and the International Monetary Fund. “People over the next couple of weeks will still be drawn to it,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to gold. “There is a tradeoff between what will happen from the political point of view and what may happen in terms of what the population may try and force.” European Union leaders have insisted Papandreou secure multi-party support for the austerity plans. The premier will now meet his counterparts at a summit in Brussels starting tomorrow that will discuss a new financing package to shield Greece from record borrowing costs for as many as three years. “Because the vote was so close, I think it will still be a thorn in the side for some time,” Lennox said. “We still may see some active agitation from the populace that may continue to put that risk flavor back into the Greek situation.” Euro Weakens The euro weakened from a one-week high against the dollar after Papandreou won the parliament vote. Europe’s shared currency fell 0.2 percent to $1.4381 as of 10:59 a.m. in Mumbai after earlier appreciating to $1.4434, the strongest level since June 15. Gold has advanced 8.8 percent this year and touched a record $1,577.57 on May 2 as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of bullion as an alternative to currencies. “In the short-term, while the European crisis hangs on, we should remain long on gold,” said Kishore Narne, head of research at Anand Rathi Commodities Ltd. in Mumbai. “The buying we are seeing right now is driven by haven demand.” Gold may reach $1,640 to $1,650 an ounce in the next three months driven by the European debt crisis and dollar weakness, before easing toward the end of the year, Narne said. Bullion futures on the Shanghai Futures exchange gained for a third day, climbing as much as 0.3 percent to a record 322.18 yuan a gram. In India, the world’s biggest gold consumer, August- delivery bullion was little changed at 22,676 rupees ($506) per 10 grams on the Multi Commodity Exchange of India Ltd. at 10:52 a.m. in Mumbai. Silver for immediate-delivery was little changed at $36.33 an ounce. Spot palladium fell 0.3 percent to $766.88 an ounce, and cash platinum lost 0.2 percent to $1,746.50 an ounce. To contact the reporters for this story: Phoebe Sedgman in Wellington at psedgman2@bloomberg.net; Madelene Pearson in Mumbai at mpearson1@bloomberg.net; To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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