Gold gets safe-haven boost on Greek fears, stocks slump

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Gold jumped 1 percent on Monday as investors sought safety in the metal after the Greece debt crisis took a turn for the worse over the weekend, with Athens looking more likely to default and exit the euro zone.

FUNDAMENTALS

Spot gold was up nearly $11 to $1,185.20 an ounce by 0030 GMT, after reaching $1,186.91 earlier in the session, its highest in nearly a week. U.S. gold futures also jumped 1 percent to a session high of $1,187.60.
Bailout talks between the Greek leftwing government and foreign lenders broke down over the weekend and the European Central Bank froze vital funding support to Greece’s banks, leaving Athens with little choice but to shut down the system to keep the banks from collapsing. The failure to reach a deal with creditors leaves Greece set to default on 1.6 billion euros of loans from the International Monetary Fund that fall due on Tuesday. Athens must repay billions of euros to the ECB in the coming months.
The impending default on the IMF loans leaves Greece sliding towards a euro exit and also carries broad implications for the global financial system. Prime Minister Alexis Tsipras late on Friday surprised creditors by calling a snap referendum on what he said were the unacceptable terms offered to keep the country from bankruptcy. U.S. stock futures and the euro fell almost 2 percent in early Asian trade on Monday. Asian shares look set to open lower, despite the Chinese central bank’s monetary easing on Saturday. The slump in global equities sent investors rushing towards safe-haven assets such as gold and the Japanese yen.
Silver climbed about 1 percent along with gold, while platinum and palladium also edged up. Elsewhere, U.S. Commodity Futures Trading Commission data on Friday showed speculators upped a bullish bet in COMEX gold futures and options and switched to a net short position in ·silver in the week ended June 23.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.25 percent to 711.44 tonnes on Friday.
Source: http://in.reuters.com/

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