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Gold rebounds from one-month low as Greek talks reach impasse
[SINGAPORE] Gold rebounded from the lowest level in a month as European leaders failed to agree on Greece's bailout programme after talks in Brussels.
Bullion for immediate delivery rose as much as 0.4 per cent to US$1,223.57 an ounce and traded at US$1,223.35 at 9.35am in Singapore on Thursday, according to Bloomberg generic pricing. Earlier, bullion fell to US$1,215.30, the lowest level since Jan 9, after the dollar advanced to 10-year high.
Gold climbed 3.3 per cent this year as the Greek crisis and more stimulus in Europe and Asia offset the impact of a stronger dollar and prospects for higher US rates.
Euro-region finance ministers failed at the meeting to reach an agreement on how to keep bailout funds flowing to Greece and are set to resume talks next week. The impasse risks leaving Greece without funding by the end of this month, when the current bailout expires.
"We continue to see a conflicted gold market," Australia and New Zealand Banking Group Ltd. said in a note, citing bears focused on the strength of the dollar against the bullish driver of haven demand. "Greece remains a focal point with negotiations reported to be at an impasse."
Eurogroup chairman Jeroen Dijsselbloem said that while the ministers covered a lot of ground, they didn't reach a joint conclusion on how to take the next steps. A Greek official said that no agreement had been made and the government won't accept an extension of the existing bailout programme.
The Bloomberg Dollar Spot Index was at 1,173.92 from 1,174.87 on Wednesday, the highest close since at least December 2004. The gauge is 3.8 per cent higher this year amid speculation that the Federal Reserve will start to increase borrowing costs.
Gold for April delivery rose 0.3 per cent to US$1,223.10 an ounce on the Comex after dropping on Wednesday to US$1,216.50, the lowest price since Jan. 9.
Silver for immediate delivery added 0.2 per cent to US$16.8416 an ounce. Spot platinum was 0.3 per cent higher at US$1,197.25 an ounce, rebounding from US$1,192 on Wednesday, the lowest level since Jan 2.
Palladium rose 0.3 per cent to US$770.95 an ounce.