Gold extends gain from 1-month low as Greece spurs haven demand
Gold rose for a second day, extending gains from a one-month low, as Greece's political crisis spurred demand for a haven. Silver climbed. European policy makers are striving to fend off a return of the region's debt crisis. Greece has begun an election campaign that Prime Minister Antonis Samaras said will determine the country's euro membership. Samaras used a Jan. 2 speech to warn that victory for the main opposition Syriza party would cause default and Greece's exit from the 19-member euro region. Gold rose for the first time in four months in December as slowing economic growth outside the U.S prompts governments to boost stimulus as the Federal Reserve moves closer to raising interest rates.
"Greece probably doesn't have the potential to cause a systemic crisis as it did a few years ago, but if you're short gold you probably want to cover," Robin Bhar, an analyst at Societe Generale SA in London, said by phone. "It might pay to go long, on the perhaps negative sound bites coming out of Greece." Bullion for immediate delivery rose as much as 0.8 percent to $1,197.97 an ounce and traded at $1,195.48 by 9:48 a.m. in London, according to Bloomberg generic pricing. It reached $1,168.34 on Jan. 2, the lowest since Dec. 1. Gold for February delivery gained 0.8 percent to $1,195.30 on the Comex in New York. Futures trading volume were about the average for the past 100 days for this time of day, according to data compiled by Bloomberg. The euro fell to the weakest level in almost nine years versus the dollar amid speculation the European Central Bank is moving closer to large-scale sovereign-bond purchases. A weaker euro has helped gold priced in the currency to climb to the highest since September 2013. Silver for immediate delivery increased as much as 2.3 percent to $16.1065 an ounce in London and last traded at $16.0728. Platinum rose 0.5 percent to $1,208 an ounce. Palladium added 0.4 percent to $798.25 an ounce after falling the previous five days in the longest run of losses since July.