The gold price was last up about 0.4 percent in Friday morning trading after the euro climbed on news that Greece has made significant progress towards securing a new bailout deal.
Spot gold at $1,162.80/1,163.60 per ounce was up $5 on Thursday’s close. It has traded in an intraday range of around $6 so far.
With just days until the final deadline for Greece to reach an arrangement with its creditors, the country’s prime minister has offered to meet most of their initial demands.
According to reports, the latest proposals are almost identical to those that were offered to Greece on June 26, which was later rejected by the Greek people in a referendum on July 5.
The resulting gains in the euro to 1.1120 against the dollar have propelled gold higher although it is still on course for a third consecutive lower week. European indices are also in positive territory once again.
As well, market observers have widely interpreted the dovish minutes from the previous FOMC latest meeting as delaying any near-term rise in interest rates.
“Without a real threat of an interest rate hike in the near future and the Greek crisis essentially putting the Fed in a sort of boxed position many traders have decided to try their hand again at going long,” Heraeus said on Thursday.
“The charts for gold and silver point to the upside but not by much; we will still need some kind of kicker to turn things around and China is not likely to inspire confidence,” it added.
In China, the SCI has enjoyed its biggest two-day gain since 2008, closing 4.5 percent higher after gains of around six percent on Thursday. Thanks to extensive state intervention, the index closed higher on the week after three weeks of heavy losses in which it fell more than 30 percent from its highs.
Over the past four weeks, Beijing has cut interest rates and lowered bank reserve requirements, suspended new IPOs, provided more financing for purchases of shares in small and medium-size companies, encouraged executives to buy more shares in their own companies and banning those holding stakes of more than five percent from selling any for the next six months.
But there are concerns about what will happen when Beijing withdraws these measures – trading in up to half of all listed companies is suspended and state-backed margin finance company China Securities Finance Corp has been actively supporting the rest through buying.
A further sell-off may see some circulation of funds into the likes of precious metals, some traders suggested.
The euro shrugged off some disappointing data out of Europe this morning – the German WPI at -0.2 percent was below the expected 0.5 percent while French industrial production fell short at 0.4 percent. Still, the Italian number bettered expectations at 0.9 percent.
Earlier, the Japanese PPI for June at -2.4 percent was weaker that the forecast -2.2 percent and consumer confidence at 41.7 was roughly in line with the predicted 41.9.
In the other metals, silver remained slightly higher at $15.40/15.45 per ounce, up three cents. The metal is still on course for a loss this week although it has recovered from its lowest this year at $14.68.
The PGMs have also bounced – platinum was last up $10 at $1,030/1,035 per ounce – it had hit fresh six-year lows earlier in the week at $1,010. Palladium was $13 higher at $647/652, having matched a June 2013 low earlier in the week at $630.
(Editing by Mark Shaw)
The post Gold price ticks higher, growing optimism for Greek deal appeared first on The Bullion Desk.
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