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[MELBOURNE] Gold rebounded before an emergency meeting of official creditors to discuss Greece's debt obligations as Germany maintained that the country must comply with the terms of its bailout, boosting demand for haven assets.
Bullion for immediate delivery added as much as 0.4 per cent to $1,238.84 an ounce and was at $1,237.90 at 2:33 p.m. in Singapore, Bloomberg generic pricing showed. Gold fell 0.4 per cent on Tuesday, reversing a gain of as much as 0.6 per cent, as investors weighed the outlook for a compromise.
Gold climbed 4.5 per cent this year as rising haven demand, spurred in part by the Greek crisis, helped to counter the impact a strong dollar and prospects for higher U.S. rates. The impasse risks leaving the country without funding by the end of the month, when its current bailout expires. While German Finance Minister Wolfgang Schaeuble doused expectations of a positive outcome at the meeting in Brussels, Greek Prime Minister Alexis Tsipras said there is "no way back."
"Gold is clearly conflicted between the positive U.S. dollar sentiment pushing the bullion lower and the Greek-euro issues providing support," Australia & New Zealand Banking Group Ltd. wrote in an e-mailed note.
Tsipras's anti-austerity government has laid out a list of policy actions, including an increase in the minimum wage. The measures would breach the terms of the country's emergency loans agreement with the euro area and the International Monetary Fund. Greece's public debt stands at more than 320 billion euros (S$491 billion), or about 175 per cent of gross domestic product.
Gold dropped to $1,228.48 on Feb. 6, the lowest since Jan. 15, after U.S. payroll gains in January capped the biggest three-month increase in 17 years, boosting the odds the Federal Reserve will raise borrowing costs. Rising rates dent gold's appeal as it tends to offer returns only through price gains.
Bullion for April delivery rose 0.5 per cent to $1,237.80 an ounce on the Comex. Silver for immediate delivery added 0.5 per cent to $17.012 an ounce. Platinum increased 0.3 per cent to $1,212 an ounce after dropping on Tuesday to $1,204.50, the lowest since Jan. 5. Palladium rose 0.2 per cent to $772.35.