Gold price gains from weaker dollar, Greek crisis eyed

Otmane El Rhazi from The Bullion Desk.

The gold price was seen climbing in early morning London trading on Friday, as a weaker dollar gave the metal the impetus to move upwards.

Spot gold was last seen at $1,228.70/1,229.50 per ounce, up $5.80 for the session, with the dollar down to 1.1427 against the euro.

Other metals also benefitted, silver was last seen up 10 cents at $16.92/16.97 per ounce, while platinum was up $6 at $1,202/1,207, as was palladium at $776/782, up $7.

“The precious metals continue to consolidate with bullion and palladium prices seemingly doing so in bull-flags, while platinum has had a more meaningful correction with all the gains from January wiped out. On balance, we remain friendly towards the precious metals,” FastMarkets analyst William Adams said.

The greenback’s losses stem from weaker US data in the previous session. US weekly unemployment claims came in larger than expected at 304,000, while retail sales at -0.8 percent and core result sales at -0.9 percent also disappointed.

Also buoying markets, risk-sentiment remains on whether or not Greece can reach an agreement with its creditors over the country’s bailout, although positivity is building.

Athens has agreed to talk to the IMF, the ECB and the European Commission on Friday about a compromise on the bailout deal which expires on February 28.

The European Central Bank (ECB) has also approved extra emergency finance for Greek banks – raising the cap on emergency funding for Greek banks by five billion euros.

The peace deal in Ukraine has however dampened gold’s credentials as a safe-haven, although buying in Asia has offset some of the losses.

“The New York sessions tone was certainly more subdued, with the headlines regarding the cease-fire between Russia and Ukraine weighing on the price and pushing back down towards $1,220,” MKS said in a note. “Once again though buying underneath this level from Asian names supported the market so this $1,215-20 area looks to be decent short term support.”

In data, German prelim GDP was positive at 0.7 percent, while the French number was expected at 0.1 percent. German WPI however, undershot at -0.4 percent but French prelim non-farm payrolls were positive at 0.0 percent.

Later, the EU will release flash GDP and trade balance, while the US has import prices, prelim UoM consumer sentiment and prelim UoM inflation expectations.

(Editing by Kathleen Retourne)

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