(Updates prices; adds details, comment)
By Rujun Shen
SINGAPORE, Feb 15 (Reuters) - Gold gained half a
percent on Wednesday, on course for its biggest one-day rise in
a week, on hopes Greece would deliver on a commitment to
implement tough austerity measures and on China's pledge to keep
investing in euro zone government debt.
Bullion rose in line with gains in the euro and equities on
optimism about a Greek deal and comments from the Chinese
central bank governor on willing to help the euro zone.
Gold, though viewed as a safe haven, has tracked the
fortunes of riskier assets in the past few months, as market
turbulence caused by the euro zone debt crisis forces investors
to sell gold to cover losses elsewhere.
"Markets are turning higher this afternoon probably on hopes
of progress in Greece," said Ronald Leung, a physical dealer at
Lee Cheong Precious Metals in Hong Kong, but adding that gold is
likely to remain in consolidation mode in the absence of
fundamental change on the situation in Europe.
Many analysts said they remained sceptical of a speedy
resolution to the Greek debt crisis, after Athens had broken
many promises and missed a number of deadlines in recent weeks
to deliver a plan of reforms and austerity measures.
Spot gold gained nearly half a percent to $1,727.39
an ounce by 0740 GMT. U.S. gold gained 0.7 percent to
$1,729.40.
Technical analysis suggested that spot gold could fall to
$1,698 an ounce during the day, said Reuters market analyst Wang
Tao.
Hedge fund manager and long-time gold bull John Paulson cut
his gold ETF bullion holdings by about $600 million in the
fourth quarter, a second straight reduction that was likely
driven by client redemption needs as he remained upbeat on the
metal.
Paulson's selling in the SPDR Gold Trust was more than
offset by buying by other investors, reflecting long-term
confidence in gold.
"In the long run, the euro zone debt crisis is still
supportive of gold," said Hou Xinqiang, an analyst at Jinrui
Futures based in the southern Chinese city of Shenzhen.
"In the short term, gold is due to stay in consolidation
mode, with the lower end of the range at $1,700 presenting a
buying opportunity."
Spot platinum rebounded after hitting a one-week low
of $1,615.98 in the previous session, rising 0.7 percent to
$1,634.74.
Precious metals prices 0740 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1727.39 8.29 +0.48 10.46
Spot Silver 33.67 0.13 +0.39 21.60
Spot Platinum 1634.74 10.66 +0.66 17.35
Spot Palladium 685.72 3.52 +0.52 5.09
COMEX GOLD APR2 1729.40 11.70 +0.68 10.38 19183
COMEX SILVER MAR2 33.70 0.35 +1.04 20.71 2594
Euro/Dollar 1.3176
Dollar/Yen 78.42
COMEX gold and silver contracts show the most active months
