By Marie-Louise Gumuchian
LONDON, June 17 (Reuters) - Gold cut losses to trade steady
on Friday as the dollar weakened and the Greek debt crisis
raised risk aversion, which could still spur safe haven buying.
Spot gold XAU= was around $1,527.70 an ounce by 1330 GMT
compared with $1,528.35 late in New York on Thursday. It is
heading for its second consecutive weekly drop.
Greek Prime Minister George Papandreou sacrificed his
finance minister on Friday and put his main socialist party
rival into the job in a bid to force through an unpopular
austerity plan to avert bankruptcy. [ID:nLDE75G0JV]
In Berlin, the leaders of Germany and France, Europe's two
central powers, called for a quick deal on a second bailout for
Greece with voluntary involvement of private bondholders, in
accord with the European Central Bank. [ID:nB4E7GN03W]
"I'm still pretty convinced gold will hold up. The risk
sentiment is not good, it's very sour," VTB Capital analyst
Andrey Kryuchenkov said.
"The only key downside risks I see for gold is the Fed
turning outright hawkish, which is unlikely in the near term and
a sudden improvement in risk sentiment."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Stories on euro zone crisis: [ID:nTOPEURO]
Euro zone debt crisis in graphics:
r.reuters.com/hyb65p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The euro rose on hopes for a new Greek aid package and as
Germany vowed to work with the European Central Bank to resolve
the crisis, although the currency remained vulnerable if there
was no concrete solution. [FRX/]
European Commission President Jose Manuel Barroso called on
Friday for Greek politicians to support reforms, saying the
country itself and the European Union must both work to preserve
financial stability. [ID:nBRU011560]
Gold is some 3 percent below a lifetime high around $1,575
touched in early May. Recent gains were driven by debt problems
in Europe, inflation fears in China following strong economic
data, and worries about a U.S. economic slowdown.
U.S. FED
Investors await the U.S. Federal Reserve's Federal Open
Market Committee's announcement on interest rates on June 22.
The Fed last November announced a programme to buy $600
billion in Treasuries to help push long-term interest rates
lower and stimulate the economy. That programme will end June
30. [ID:nN16236325]
The physical market saw sales of gold scrap, while top
consumer India was in a lean spell as farmers were busy sowing
seeds during the monsoon season. [GOL/IN] [GOL/AS]
"Gold prices remain supported by the macro environment
despite seasonal weakness," Barclays Capital said in a note.
Holdings of the largest silver-backed exchange-traded fund
(ETF), New York's iShares Silver Trust (SLV), fell 0.27 percent
from Wednesday to Thursday, while, the largest gold-backed ETF,
New York's SPDR Gold Trust (GLD), remained unchanged for the
same period. [GOL/ETF]
Silver XAG= was at $35.37 from $35.48 an ounce. Platinum
XPT= was down at $1,743.99 an ounce from $1,752.20. Palladium
XPD= was at $750.75 an ounce from $752.40. For the week,
palladium was down more than 6 percent.
"The PGMs have been caught between supply side constraints
and physical demand, from China in particular, providing support
on the downside but a demand slowdown capping the upside,"
Barclays Capital said.
(Editing by James Jukwey)
