10 February 2015
Gold Extends Gain as Greek Standoff With Creditors Boosts Demand
(Bloomberg) - Gold rose for a second day on concern that a standoff between the new Greek government and its creditors may worsen, with German Chancellor Angela Merkel signaling little willingness to compromise over bailout conditions.
Bullion for immediate delivery advanced as much as 0.5 percent to $1,245.36 an ounce, and was at $1,243.90 at 11:27 a.m. in Singapore, according to Bloomberg generic pricing. Prices, which gained 0.4 percent on Monday, haven’t posted a back-to-gain daily gain since Jan. 16.
German leaders said they won’t extend more assistance to Greece without strings attached, and the impasse risks leaving Europe’s most-indebted state without funding by the end of this month, when the current bailout expires. Greece will seek about 10 billion euros ($11.3 billion) in short-term financing to stave off the cash crunch, according to a government official who asked not to be identified. Bullion rose 5 percent in 2015, after two years of losses, as investor holdings expanded .
“Political tensions in Greece rejuvenated safe-haven buying,” Australia & New Zealand Banking Group Ltd. wrote in a note. “Already this year, holdings in global exchange-traded products backed by gold have climbed 5 percent, with another strong rise last week.”
Prime Minister Alexis Tsipras is seeking to get out of austerity imposed by the previous government as a condition for Greece’s bailout, setting the stage for a clash. Planned policy measures, including a minimum-wage increase, will be put to a confidence vote in Greece’s parliament on Tuesday. The move would breach the terms of the country’s emergency loans agreement with the euro area and International Monetary Fund.
Holdings in global exchange-traded products backed by gold increased on Monday to 1,678.21 metric tons, the highest level in four months, according to data compiled by Bloomberg. Assets expanded in January for the first time since July.
Gold for April delivery rose 0.2 percent to $1,243.80 an ounce on the Comex. Silver for immediate delivery added 0.4 percent to $17.062 an ounce. Spot palladium increased 0.4 percent to $783.17 an ounce, while platinum rose 0.2 percent to $1,220.63 an ounce.