Gold futures rose slightly on Tuesday but the market has been constricted to a narrow range ahead of upcoming Greece talks and next week’s meeting of the Federal Open Market Committee (FOMC).
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $5.30 at $1,199.00 per ounce. Trade has ranged from $1,192.50 to $1,201.80.
“In the last couple of weeks in particular, gold prices have been confined to a narrow range of about $25. The reality is that there are hardly any catalysts out there to encourage gold to break out in either direction,”Joni Teves, an analyst at UBS, said. “Overall uncertainty on the timing and pace of Fed tightening adds to investors’ reluctance to put on sizeable positions at this point.”
Eurozone deputy finance ministers will meet later this week to discuss the potential default by the Mediterranean country. A default could send gold prices higher as investors look for a safe-haven, but ECB vice president Vitor Constancio suggested even this wouldn’t necessarily force Greece out of the euro.
“As you saw in the case of Cyprus, capital controls did not imply getting out of the euro,” Constancio said.
In Europe, Germany’s DAX and France’s CAC-40 were up 0.9 percent and 0.4 percent respectively. The euro was 0.3 percent stronger at 1.0708 against the dollar.
It’s a pretty light day for data – German ZEW economic sentiment at 53.3 undershot the expected 55.6 but the figure for the eurozone as a whole at 64.8 was better than the forecast 63.7.
In the US, the Dow Jones industrial average and S&P 500 made gains at 1.2 and 0.9 percent respectively.
“The (precious metal) declines were partly on account of a stronger dollar and partly due to a solid rebound in the US stock market, which managed to erase most of Friday’s steep loss,” Edward Meir, an analyst at INTL FCStone, said.
India today celebrates the festival of Akshaya Tritiya, one of the most auspicious days in the calendar to buy gold.
While Indian imports of 125 tonnes in March may weigh on premiums, good demand should add some near-term support for gold in the coming sessions, although demand is subdued so far, according to local reports.
As for the other precious metals, Comex silver for May delivery was up five cents at $15.945 per ounce. Trade has ranged from $15.86 to $16.165. Platinum for June delivery on the Nymex rose $0.90 at $1,149.7 per ounce, while the most actively traded palladium contract was at $773.64, up $1.25.
In other markets, light sweet crude (WTI) futures were down nine cents or 0.2 percent at $56.29 per barrel in the most active contract.
(Editing by Tom Jennemann)
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