RTRS: PRECIOUS-Gold rises 1 pct on fears of Greek default
By Lewa Pardomuan
SINGAPORE, Oct 4 (Reuters) - Gold gained 1 percent on
Tuesday, rising for a fourth day, as investors dumped equities
and turned to bullion on growing fears that a Greek default
could trigger another global recession.
As safe-haven buying lifted gold prices, European stock
index futures slipped on doubts over Greece's ability to avoid
default, copper fell for a fifth day and Brent crude fell more
than a dollar to below $101 a barrel.
Credit Suisse raised its 2012 gold price forecast to $1,850
from its prior forecast of $1,540, saying the clear beneficiary
of the uncertainty and dislocations in financial markets has
further upside with the crises set to continue.
Spot gold rose $16.79 to $1,673.19 an ounce by 0636
-- well below a lifetime high around $1,920 struck in early
September.
"The long-term uptrend for gold remains intact and we remain
bullish. Gold could climb to about $2,000 an ounce in 2012. Safe
haven bids could slowly return as prices stabilise," said Ong Yi
Ling, an analyst at Phillip Futures in Singapore
"A sustained breach of $1,700 is needed for gold to resume
its upward ascent. After the sell-off in gold earlier, this has
reduced some of the speculative positions."
U.S. gold futures GCcv1 added $18 to $1,675.7 an ounce.
Euro zone finance ministers are reviewing the size of the
private sector's involvement in a second international bailout
package for Greece, which could undermine the aid programme and
hasten the threat of a Greek default.
The euro fell to as low as $1.3163 early on Tuesday
before stepping back to around $1.3207, up slightly on
short-covering from $1.3170 in late U.S. trade.
The physical market paused for breath after a buzz of
activity in the past week. Premiums for gold bars were steady at
$2 an ounce to spot London prices in Singapore, the highest
since February, after a recent correction ignited a rush in
buying from jewellers and speculators.
Gold plunged to a two-month low around $1,534 an ounce in
late September.
"I can finally take a breath after a few weeks of hectic
trading. We saw some selling from Thailand and the Middle East
but the market is otherwise quiet," said a physical dealer in
Singapore.
In other precious metals, silver and palladium
firmed, while platinum tracked equities lower despite
encouraging auto sales in the United States.
Platinum and palladium are used in auto catalysts.
U.S. auto sales rose almost 10 percent in September,
allaying concerns of a double-dip recession as major automakers
forecast stronger sales through the remainder of the year.
Still battling to rebound from the effects of the March
earthquake in Japan, Toyota Motor Corp and Honda Motor
Co posted sales declines of almost 18 percent and 8
percent.
