Gold futures steady near 3-week high as Greece uncertainty remains

Forexpros - Gold futures swung between small gains and losses on Wednesday, but held steady near the highest level in almost three weeks as uncertainty remained over Greece’s ability to implement strict austerity measures in compliance with its new bailout deal.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,759.35 a troy ounce during early European morning trade, easing up 0.05%.      

The April contract traded in a range between USD1,755.75, the daily low and USD1,761.85, the session’s high.

Futures were likely to find support at USD1,732.35 a troy ounce, Tuesday’s low and short-term resistance at USD1,765.85, the high from February 3.

Gold futures posted their biggest one-day gain in nearly two weeks on Tuesday, rallying 1.5% to the highest level since early February after euro zone finance ministers approved a second bailout package for Greece.

Private-sector creditors also agreed to take a write-down on their bonds of more than 53%, which is expected to cut Greece's debt by EUR107 billion.

But investors remained wary amid concerns that a general election in Greece, which is expected to take place in April, could result in problems implementing the terms of the package.

Some market participants felt the deal was only a short-term fix that falls short of what Greece needs to prevent financial collapse.

Trading in Asia was characterized by a lack of conviction as the absence of positive catalysts sidelined many buyers.

Barclays said in a report Tuesday that “gold is searching for its next catalyst” after trading in a range between USD1,700 and USD1,760 since the beginning of February.

Some market participants believe the European Central Bank’s second liquidity injection operation next week will be a positive catalyst, while others said growing tension between Iran and the West was likely to propel prices higher.

Elsewhere on the Comex, silver for March delivery dropped 0.8% to trade at USD34.14 a troy ounce, while copper for March delivery eased down 0.1% to trade at USD3.834 a pound.

Silver prices came under pressure after data showed that Chinese imports of silver fell to 191.7 tonnes in January, their lowest in three years.

In 2011, China imported a total of 3,575 tonnes of silver, the lowest in at least four years and down from 5,154 tonnes in 2010.

But in more bullish news for the metal, India's imports could top 5,000 tonnes in 2012 compared with 4,800 tonnes a year ago, president of Bombay Bullion Association Prithviraj Kothari said on Tuesday.

If imports were to rise above 5,000 tonnes, this would mark a high since 2008's 5,48 tonnes in imports.