By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Gold futures retreated during Asian trading hours Monday, as a Greek election victory for pro-euro forces appeared to dampen the metal’s safe-haven demand.
August gold futures GCQ2 -0.53% slipped 0.2% to 1,624.50 an ounce, down from their $1,628.10 settlement Friday on the Comex division of the New York Mercantile Exchange.
The losses came on the heels of a strong week for gold futures, in which the benchmark contract rose 2.3% amid hopes for fresh easing from the world’s major central banks. Read more on last week’s gold action.
While concerns about a possible Greek exit from the euro zone had also helped support gold the previous week, those concerns eased somewhat after the New Democracy party, which supports measures to keep the euro, won a victory in Sunday’s election. Read more on Greek vote.
However, HSBC analysts said in a note ahead of the Greek election that regardless of the outcome, they expected gold to move above $1,900 by the year’s end, “based on the likely impact of easy monetary policy.”
“The possibility that the Federal Reserve and other central banks may loosen monetary policy later this year ... is potentially supportive of gold, in our view. Government policies aimed at keeping real interest rates negative are especially positive for gold,” they said in a note.
The analysts also cited increased gold demand by central banks, but said this could be offset by higher scrap-gold supplies and lower jewelry demand.
Elsewhere in the metals complex Monday, silver followed gold lower, with the July contract SIN2 -0.84% slipping to $28.62 an ounce, a 0.4% loss from its Friday settlement of $28.74.
However, July copper HGN2 +0.92% surged 1% to $3.42 a pound, up from $3.38 Friday.
July platinum PLN2 +0.22% also gained ground, rising 0.5% to $1,494.60 an ounce, up from $1.487.20.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
