Gold clings above 4-month low on euro, but eyes 3rd weekly drop

Gold held above a four-month low on Friday, spurred by a firmer euro on signs of progress in debt-hit Greece’s efforts to secure fresh funding. But bullion is still down so far for the week, its third in a row, amid weak physical demand in top consumers China and India. Prices have been trapped in a tight range with global uncertainties from Greece to China failing to spark safe-haven bids.
“Gold may remain weak in the near term at least until physical buyers resurface, in our view,” said HSBC analyst James Steel. Spot gold was little changed at $1,159.91 an ounce by 0216 GMT. It had lost 0.7 percent for the week after touching $1,146.75 on Wednesday, its lowest since March 18.
U.S. gold for August delivery was flat at $1,159.30 an ounce. The Greek government sent a package of reform proposals to its euro zone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote on Friday to endorse immediate actions.
The euro gained against the dollar on the news, making dollar-denominated assets such as gold cheaper for buyers using other currencies. In China, stocks rose sharply for a second day on Friday after Beijing moved to arrest a rout that pulled down key indexes by around 30 percent from mid-June, banning shareholders with large stakes in listed firms from selling.
Also aiding gold, the International Monetary Fund trimmed its forecast for global economic growth this year to 3.3 percent from a previous estimate of 3.5 percent, citing recent weakness in the United States. The IMF, which kept its 2016 growth forecast at 3.8 percent, said even “if things go badly in Greece … the rest of the world would probably survive quite well.”

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