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Gold rises as Greek rescue deal draws closer

Published 02/07/2012, 08:24 PM
Updated 02/07/2012, 08:28 PM
Investing.com - Gold prices rose in Asian trading Wednesday as Greece and lenders put the final touches on an array of agreements Athens must meet in order to tap assistance funding.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,751.45 a troy ounce, up 0.17%.     

Gold futures were likely to test support at USD1,712.65 a troy ounce, Tuesday's low, and resistance at USD1,765.85, Friday's high.

Greece is seeking EUR130 billion in assistance funding to help it avoid a March 20 default, and must restructure its debts with private creditors as well as agree to austerity measures from multilateral lenders to tap those funds.

A deal was in sight Wednesday, which sparked demand for euro while investors ditched greenback positions.

Dollar sales often push up gold prices.

While optimistic, the market remained edgy, as until a deal becomes finalized, further delays and setbacks were possible.

"Frankly I do not see the end of tunnel as far as Europe, and especially Greece, is concerned," said Afshin Nabavi, head of trading at MKS Finance in Geneva, according to Reuters.

"Uncertainty generally generates demand for the metal, so should push it higher."

Furthermore, Federal Reserve Chairman Ben Bernanke's comments in Congress suggested that the door isn't shut on the possibility of ultra-loose monetary policies like quantitative easing, which also pressured gold higher.

Elsewhere on the Comex, silver for March delivery was down 0.06% and trading at USD34.173 a troy ounce, while copper for March delivery was up 0.20% and trading at USD3.873 a pound.





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