Gold Back Above $1,200 As Dollar Slips
Singapore: Gold reversed earlier losses to trade above $1,200 on Wednesday as the US dollar weakened, with investors also keeping an eye on the Greek debt crisis and its impact on the currency markets.
Spot gold was little changed at $1,203.11 an ounce by 0653 GMT, after earlier dipping to a session low of $1,198.65.
"Gold is closely tracking the U.S. dollar at the moment. There isn't any big economic data so investors are following the Greek drama," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
A strong rally in stock markets was also keeping investors out of gold, Leung said.
Japanese shares rose to a 15-year high on Wednesday on expectations of improved corporate earnings.
Gold, often seen as a safe-haven investment, tends to see a drop in demand when equities are doing well.
The dollar eased against a basket of major currencies on Wednesday after putting in a mixed performance overnight.
Greece, which is quickly running out of cash, pledged to its eurozone partners in February that by the end of April it would agree with creditors on a comprehensive list of reforms to get 7.2 billion euros remaining from its bailout.
But no package will be ready by Friday, when eurozone ministers are to meet in Riga, and it was also unlikely that one would be ready by the end of the month, according to a senior eurozone official.
Prolonged uncertainty over the debt crisis - which if unresolved could see Greece exiting the euro zone - could boost demand for bullion, seen as a safe haven, although the resulting strength in the dollar could limit gains.
In a reflection of investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.45 percent to 742.35 tonnes on Tuesday.
Traders were also monitoring activity in the physical markets.
India, the top bullion consumer, celebrated the gold-buying festival of Akshaya Tritiya on Tuesday. Gold purchases started slowly, despite a fall in local prices, as hard times in rural areas have hit demand and many buyers were holding back because they expected prices to fall even further.