February 04, 2015
Gold struggles as Greek plan boosts equities
(Reuters) - Gold steadied on Wednesday after falling more than 1 percent in the previous session as Greece's plan to end a standoff with creditors lifted the appetite for risky assets such as equities.
Spot gold was up 0.2 percent at $1,262.04 an ounce by 0403 GMT, after falling 1.2 percent on Tuesday, which marked gold's fourth drop in five sessions.
"Appetite for risk now appears higher and that is spurring some rotation of funds away from the safe havens in the yen and gold to riskier assets such as equities and the euro," Phillip Futures investment analyst Howie Lee said in a note.
"Barring any downside black swan events, it is now increasingly unlikely that we could see gold racing for $1,300 again in the near future."
Spot gold has steadily fallen since hitting a five-month peak of $1,306.20 on Jan. 22, paring the metal's year-to-date gain to less than 7 percent.
U.S. gold for April delivery was also nearly flat at $1,261.50 an ounce.
Greece's new government dropped calls for a write-off of its foreign debt and proposed ending a standoff with its official creditors by swapping the debt for growth-linked bonds.
That helped calm fears over the euro zone, lifting Asian stocks which tracked Wall Street's gains overnight. A sharp 19 percent rebound in oil prices in the four sessions to Tuesday also burnished risk appetite even as crude pared some of those gains on Wednesday.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 24.59 million ounces on Tuesday from 24.65 million ounces the day before, which was the highest level since October.
Precious metals prices 0403 GMT Metal Last Change Pct chg YTD pct chg Spot Gold 1262.04 2.33 +0.18 6.63 Spot Silver 17.27 -0.01 -0.06 10.28 Spot Platinum 1232.30 2.30 +0.19 2.70 Spot Palladium 785.80 3.80 +0.49 -0.87 COMEX GOLD APR5 1263.10 2.80 +0.22 6.67 COMEX SILVER MAR5 17.32 0.00 -0.01 11.03 Euro/Dollar 1.1465 Dollar/Yen 117.88 COMEX gold and silver contracts show the most active months