Gold extends gains as Greek fears remain at bay

Ramon Ramirez · May 22, 2012

Forexpros - Gold prices were up in Asian trading on Tuesday, extending Monday's gains in edgy trading on talk global leaders remained committed to keeping Greece in the eurozone.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.23% at USD1,592.35 a troy ounce.

Gold traded at a low of USD1,592.15 a troy ounce and hit a high of USD1,594.55 a troy ounce during the session.

Gold futures were likely to test support at USD1,542.85 a troy ounce, the low on May 17, and resistance at USD1,601.75, the high from May 10.

World leaders representing the Group of Eight large industrialized economies recently stated they would do what it takes to keep Greece in the eurozone, including U.S. President Barack Obama and German Chancellor Angela Merkel.

German Finance Minister Wolfgang Schaeuble, himself a vocal supporter for imposing austerity measures on Greece in exchange for bailout money, assured the world Germany and France would do everything necessary to help Greece remain in the currency zone.

The news sent the euro rising, which brought gold up with it despite a rising dollar.

Talk that Japan will take new steps to weaken the yen to boost exports also sent gold rising, although choppy trading showed the yellow metal's gains may be short-lived.

Greece is headed for parliamentary elections on June 17 and expectations persist that leftist political parties opposing austerity measures such as tax hikes and spending cuts will take power and abandon belt-tightening measures, which could mean an end to rescue funding and an end to Greece's membership in the eurozone.

Such fears have sent gold's traditional hedge, the dollar, climbing in the past.

Elsewhere on the Comex, silver for July delivery was up 0.63% and trading at USD28.500 a troy ounce, while copper for July delivery was down 0.11% and trading at USD3.527 a pound.