By Nick Godt, MarketWatch
MUMBAI (MarketWatch) — Gold and silver futures fell on Friday, as mounting concerns about a Greek default weighed on the euro, and with safe-haven bids benefiting the dollar instead of precious metals.
Gold for August delivery GC1Q -0.20% fell $6.20 to $1,523.80 an ounce in electronic trade. Silver for July SI1N -1.19% delivery fell 59 cents to 34.97 an ounce.
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On Thursday, gold futures had gained, with uncertainty surrounding Greece and the euro providing a lift to the precious metal, while concerns about a U.S. economic slowdown kept the dollar under pressure.
But on Friday, the euro sank 0.5% to $1.4141, lifting the dollar index DXY -0.07% , a basket of six major currencies heavily influenced by the euro.
While street protests turned violent in Greece over the steep spending cuts undertaken by the country to try and reduce its debts and avoid default, Prime Minister George Papandreou fought for his government’s survival and appointed Evangelos Venizelos as the nation’s new finance minister. Read about Greece and Evangelos Venizelos .
Euro-zone governments and the International Monetary Fund, meanwhile, have asked for a debt-reduction plan before delivering rescue loans. German Chancellor Angela Merkel and French President Nicolas Sarkozy were due to meet in Berlin Friday to try and reach an agreement.
In the meantime, the euro is likely to weaken further, according to David Song, currency analyst at DailyFX.
“European Central Bank President Jean-Claude Trichet may soften his hawkish tone for monetary policy as the economic recovery in Europe slows,” he said in a note. “As a result, the shift in risk-taking behavior could be short-lived, and the U.S. dollar may appreciate further over the near-term as it benefits from safe-haven flows.“
Nick Godt is a MarketWatch reporter based in Mumbai.
