Gold held onto its modest gains in Tuesday afternoon trading, propped up by a weaker dollar and growing fears over a Greek exit from the eurozone.
The spot gold price was last at $1,192.80/1,193.50 per ounce, up $10.20 on Monday’s close. It hit its highest in nearly a week at $1,197.20 when markets sparked into life around 11:00 local time.
Other metals were largely similar – silver was last 30 cents higher at $16.55/16.60 per ounce, while in the PGMs platinum was up $18 at $1,139/1,144 and palladium climbed $8 to $784/789.
Gold gained $10 in 15 minutes late this morning, platinum $11, palladium $5 and silver 22 cents, Standard Bank’s Leon Westgate pointed out.
“It isn’t clear what triggered the move, with the dollar weakening throughout the course of the morning rather than specifically moving at the same time,” he said in a note. “It may have been a system playing catch up with the currency move as all of the precious metals reacted in unison.”
With little fresh data to drive markets today, gold’s main driver was the dollar, which was around one cent weaker against the euro at 1.1246. In the only piece of data of note, US JOLTS job openings at 4.99 million undershot expectations at 5.16 million.
A Greek default is becoming increasingly likely while the country continues to negotiate with its creditors, with no resolution on particular issues such as state pensions and collective bargaining rights on the horizon.
And although Athens has started to repay 750 million euros to the International Monetary Fund ahead of today’s deadline, easing fears of a default this month, Greek finance minister Yanis Varoufakis has warned that his country faces insolvency within weeks and Alexis Tsipras’ government said this morning that it has just over 600 million euros in cash reserves.
“Greece continues to fight its corner, paying back money as and when required (for the moment at least) and doing just enough to keep the ECB off its back ahead of tomorrow’s assessment of the emergency liquidity lines to Greek banks,” Westgate added.
“The markets will likely remain volatile however, particularly if days turn into weeks and we get closer to Greece’s estimates of when it will run out of cash,” he added.
In other markets, European stock markets all closed in negative territory; a similar story is currently playing out in the US, with the S&P 500 down 0.33 percent and the Nasdaq down 0.37 percent.
The big winner today was Brent crude oil, which was last $2 higher at $66.85 per barrel.
(Additional reporting by Dalton Barker, editing by Mark Shaw)
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