WSJ:PRECIOUS METALS: Gold Rises In Asia As Greek Vote Boosts Sentiment
By Clementine Wallop
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Gold prices rose in Asian trading Monday, as sentiment improved and the euro firmed after the Greek parliament approved a fresh round of austerity measures necessary to secure EUR130 billion in bailout funds.
Spot gold was trading at $1,729.53 a troy ounce at 0520 GMT, up $7.43 from its previous close. The yellow metal climbed amid broad-based gains in the commodities and equities markets following the Greek parliament's vote.
"It [the Greek vote] is probably positive for markets overall I would have thought, certainly compared to Friday's view that it was all going to fall apart again," an analyst at a major Australian bank said.
A firmer euro helped support buying, as dollar-priced commodities are cheaper to investors holding other currencies when the greenback weakens. The euro was at $1.3255 compared with $1.3201 late Friday in New York.
Despite Monday's gain, investors remain nervous, and the relief rally is likely to peter out in the next few sessions as wider concerns about euro-zone debt contagion resurface, a Beijing-based analyst said.
"I don't think a full solution to the crisis will become clear soon, and investors are still very cautious," she said.
She forecast choppy trading over the next few weeks as gold remains sensitive to macroeconomic developments in Europe.
A meeting of euro-zone finance ministers scheduled for Wednesday is likely to drive gold prices in the second half of the week, she said.
Any rebound in the dollar is likely to weigh on gold and spur profit-taking in the Asian market, she said.
"At the moment everyone is looking at the euro-dollar," she said, tipping major resistance for gold at $1,800/oz.
Silver prices also rose, climbing 24 cents to trade at $33.83/oz. Barclays Capital said in a note that a break above $34.55/oz would signal a move toward its target of $35.70/oz. Silver has risen 21.7% so far this year.
Platinum rose $4.00 to trade at $1,656/oz, while palladium broke back above $700/oz, rising $3.94 to 702.94/oz.
-By Clementine Wallop; Dow Jones Newswires; 65 64154 082; clementine.wallop@dowjones.com
