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Gold climbs toward highest level since August after Greek vote
[NEW YORK] Gold advanced toward a five-month high as anti-austerity party Syriza's victory in Greek elections raised concern that the country may exit the euro area, boosting demand for a haven. Silver and platinum increased.
Bullion for immediate delivery rose as much as 0.4 per cent to US$1,299.31 an ounce, and traded at US$1,297.21 at 9:47 am in Singapore, according to Bloomberg generic pricing. The metal climbed on Jan 22 to US$1,307.62, the highest level since Aug 15, as the European Central Bank expanded stimulus.
Syriza leader Alexis Tsipras said Greece's era of bowing to international creditors is over. Even with a thin majority or in a fragile coalition, the result hands Tsipras a mandate to confront the austerity program imposed in return for pledges of 240 billion euros (US$268 billion) in aid since 2010. Gold rose 9.5 per cent this year, also helped by speculation the Federal Reserve may hold back from raising interest rates.
"The outcome of the Greek elections raises fears of an exit from the euro zone, increasing uncertainties in the market and therefore demand for gold in the short-term," said Lv Jie, an analyst at Cinda Futures Co, a unit of one of four funds in China created to buy bad debt from banks.
Gold's 14-day relative-strength index held around the level of 70 which signals to some investors that prices may reverse. Holdings in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, expanded to 741.65 metric tons on Jan 23 to cap a second week of gains.
Bullion for February delivery increased 0.4 per cent to US$1,297.10 an ounce on the Comex in New York. The net-long position in gold climbed 27 per cent to 145,732 futures and options contracts in the week ended Jan 20, according to US Commodity Futures Trading Commission data.
Silver for immediate delivery advanced 0.8 per cent to US$18.4359 an ounce. Platinum rose 0.3 per cent to US$1,273.13 an ounce while palladium fell 0.1 per cent to US$774.60 an ounce.