Gold holds up on Greek debt crisis, but dollar strength caps gains

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Gold was trading close to its highest in nearly a week on Monday, supported by safe-haven bids from uncertainty over the Greek debt crisis, but gains were limited by a stronger dollar and the prospect of higher U.S.  interest rates.

Gold holds up on Greek debt crisis, but dollar strength caps gains

FUNDAMENTALS

Spot gold was steady at $1,190.40 an ounce by 0037 GMT, after earlier climbing to a session-peak of $1,196.35, its highest since May 26.
Greece and its European creditors agreed on the need to reach a cash-for-reforms deal quickly as Athens missed a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.
Athens and its euro zone and International Monetary Fund creditors have been locked in talks for months on a reform agreement. Without a deal, Athens risks default or bankruptcy in weeks, a development that could have a wide-ranging impact on financial markets. The United States warned on Friday of a possible accident for the world economy if Greece and its creditors miss their June deadlines. Gold is seen as a safe bet during times of financial and economic uncertainty.
But gains in the metal were capped by a robust dollar, which has been strengthening on expectations the Federal Reserve would soon raise interest rates from record lows.
Higher rates would diminish demand for non-interest-paying gold, while boosting the dollar. Hedge funds and money managers cut their bullish bet in Comex gold during the week ended May 26, but raised it slightly in silver, U.S. Commodity Futures Trading Commission data showed on Friday.
The U.S. Mint sold 21,500 ounces of American Eagle gold coins in May, down 27.1 percent from the previous month, according to the latest data.  South African gold producer Harmony Gold is in talks with unions that could see more than 3,000 jobs cut at its Doornkop mine, the National Union of Mineworkers said on Friday.

PRICES AT 0037 GMT 

Metal

Last

Change

Pct chg

Spot gold

1190.4

0.65

0.05

Spot silver

16.71

0.015

0.09

Spot platinum

1108.2

0.2

0.02

Spot palladium

776.5

2

0.26

Comex gold

1190.5

0.7

0.06

Comex silver

16.705

0.004

0.02

Euro

1.0943

DXY

97.185

COMEX gold and silver contracts show the  most active months
Source: http://in.reuters.com/

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