FX:Gold futures hit 7-week high on Greek debt talk hopes
Forexpros - Gold futures regained strength on Tuesday, climbing to a seven-week high as the U.S. dollar weakened amid signs of progress in talks between Greece and its bondholders, while strong physical demand in China lent further support.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,746.65 a troy ounce during early European morning trade, gaining 0.71%.
It earlier rose by as much as 0.78% to trade at USD1,747.75 a troy ounce, the highest since December 8.
Futures were likely to find short-term support at USD1,719.15 a troy ounce, Monday’s low and resistance at USD1,760.35, the high from December 8.
Meanwhile, euro-denominated gold futures rose to a ten-week high of EUR1,323.15, less than 4% away from September’s all-time high of EUR1,374.70.
Speaking at a European Union summit in Brussels, Greek Prime Minister Lucas Papademos said "significant progress” was made in talks aimed at restructuring the country’s debt, boosting hopes that a deal can be finalized before the end of the week.
An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default.
Meanwhile, EU leaders agreed on its fiscal union pact and signed off on the details of a EUR500 billion permanent bailout fund for the euro zone.
The U.S. dollar weakened against most of its major counterparts, boosting the appeal of the precious metal as an alternative asset. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.26% to trade at 79.03.
Gold prices found further support after China's Beijing Municipal Commission of Commerce said earlier that sales volume for precious metals jewelry and bullion surged at an annualized rate of 49.7% during the week-long Lunar New Year holiday.
China is the world’s second largest gold consumer, trailing only India.
Elsewhere on the Comex, silver for March delivery rose 1% to trade at USD33.86 a troy ounce, while copper for March delivery gained 0.9% to trade at USD3.861 a pound.
