Gold steadies as investors mull Greek crisis

ability to remain solvent, even after Athens struck a deal with international lenders on the terms of a bailout.
Gold was still set for its largest weekly decline since the so-called commodities “flash crash” of early May, which saw the raw materials complex stage its biggest weekly fall on record.
The euro rallied overnight after Greece agreed with the European Union and the International Monetary Fund on an austerity plan that would bring it one step closer to securing much-needed financial aid.
But this was not enough to convince markets that Athens could avoid defaulting on its debt, which forced up the cost of insuring its bonds against such an event.
Spot gold was last quoted at US$1 521 an ounce, up 0,1 percent on the day, on course for a 1,2 percent fall this week.
But while gold looked vulnerable according to the charts, analysts said the high level of uncertainty would stem any steeper sell-offs.
“Technically, it doesn’t look ideal, but even if we breach US$1 510, at US$1 480. We’ll stop. I can’t see people liquidating gold right now with everything that is happening,” said VTB Capital analyst Andrey Kryuchenkov.
“You have Greece and there was nothing to indicate from the Fed that they’re turning hawkish just yet,” he said.
Gold has thrived on the expectation of an extended period of low US interest rates, which depress the dollar against other currencies and place bullion, which bears no yield of its own, in a better position to compete for investor cash against stocks or bonds.
The Federal Reserve earlier last week cut its growth forecasts for US growth, but did not signal there would be any additional policy measures, such as quantitative easing, to support the economy.
“We still are in very uncertain times and it’s likely to continue until we see greater signs of economic growth globally, particularly in the United States, and we start to see the European debt situation ease,” said Darren Heathcote, head of trading at Investec Australia. – Reuters.