Gold edges up as Greece hopes lift sentiment
The report further mentions that a modest decline in India’s GDP growth widened its fiscal deficit more significantly than observed elsewhere.
Gold edged higher on Thursday, extending gains into a second session, as fears about a messy default for Greece eased after signs it may be able to secure a crucial debt swap deal.
Gold has been recuperating from a selloff earlier in the week, together with the euro and equities, after promising U.S. jobs data and hopes that Greece will complete a crucial bond swap deal.
Spot gold edged up 0.2 per cent to $1,688.70 an ounce by 0720 GMT, standing above the 200-day moving average of around $1,678. Gold gained 0.6 per cent on Wednesday following a 2-per cent slide in the previous session.
US gold gained 0.3 per cent to $1,689.50.
"Central banks are expected to take up the role of the main agent of stimulus, since distressed governments can't provide any help on the fiscal front," said a Singapore-based trader.
"I still see a lot of long positioning out there."
Holdings in the gold-backed exchange-traded funds hit a record high, and gained 269,000 ounces since last Wednesday, when gold prices collapsed 6 per cent after U.S. Federal Reserve chief Ben Bernanke disappointed investors by not referring to any further monetary easing.
"That's a good sign, as investors appear to think it is a good opportunity to get their hands on gold," said Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore.
Physical demand also started to pick up after prices dipped below $1,700, he added.
Spot gold could rebound towards $1,712 an ounce during the day, said Reuters market analyst Wang Tao.
Gold 24-hour technical outlook:
Gold is traditionally viewed as a safe haven asset that benefits during political and economic turmoil, but in the past few months gold has largely moved in tandem with riskier assets as the financial distress threatens liquidity in the market.
"When equities drop, the pool of available funds for investing in commodities will shrink and gold will be in a bad position to compete for investors cash because its sticker price is much higher," said the trader.
"Gold is a very risky asset. People who look at it as a safe haven are missing out one thing -- when gold becomes volatile, it becomes much more volatile than currency or bond markets."
On Friday, investors will await the key U.S. non-farm payrolls data for cues on whether the Fed is likely to launch any stimulus measures soon.
China's January inflation data and industrial output data due Friday will also be closely watched, as investors gauge the pace of the world's second-largest economy.
The world's two largest platinum producers said on Wednesday they were not affected by a 1-day nationwide strike in South Africa that has brought the country's gold mines to a halt and also hit the coal sector.
Spot platinum gained 0.9 per cent to $1,639.99, off a 2-1/2-week low below $1,700 hit earlier this week.
Copyright @Thomson Reuters 2012