By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Gold futures extended gains in electronic trading Wednesday as investors await a crucial vote in Greek parliament required for the nation to secure a fresh round of financial aid.
Gold for August delivery GC1Q +0.32% added $4.00, or 0.3%, to $1,504.20 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
On Wednesday, the Greek parliament is expected to conduct the first of two votes this week on a package of austerity and privatization measures, while thousands have clashed with police in Athens in protest of the spending cuts.
The debt-plagued nation must secure the vote in order to obtain more financial assistance from the European Union and the International Monetary Fund. Read about outcomes if Greece votes no on austerity.
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Greek protest turns violent
Demonstrators clash with riot police as Greece braces for austerity cutbacks. Video and image courtesy of Reuters.
Analysts at MF Global said a positive vote isn’t likely to generate upside for metals.
“Despite nervous anticipation, markets have likely discounted a yes vote. Because investors are prepared for such an outcome, we don’t expect to see much of a relief rally when the measure actually passes, and may even see a bit of a pullback after the initial euphoria fades,” the analysts said.
“However, should the measure fail, the consequences will be quite serious, as no one is quite sure what will happen next,” they said.
Silver tracked gold higher, with the July contract SI1N +1.34% gaining 45 cents, or 1.3%, to $34.09 an ounce.
This week, the Peruvian government revoked the license for a silver mine in the country’s southeast after weeks of protests by native groups opposed to its development. Read more about Peru blocking the Bear Creek silver project.
The South American nation is one of the world’s largest gold and silver producers, but analysts at Barclays Capital don’t expect the recent disruption to impact silver prices.
“Since there is a rather comfortable physical surplus in the silver market, we do not expect the turmoil in Peru to cause significant tightening in the supply-and-demand balance,” the analysts said.
The broader metals complex also traded higher Wednesday, with palladium leading the gains.
Copper for September delivery HG1U +0.23% put on 1 cent, or 0.3%, to $4.11 a pound.
July platinum PL1N +0.85% gained $14.30, or 0.8%, to $1,705.50 an ounce, while the September contract for sister metal palladium PA1U +1.07% gained $7.85, or 1.1%, to $743.00 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
