SINGAPORE, Feb 20: Gold was little changed on Friday as investors eyed talks over Greek debt, but the metal was headed for its fourth straight weekly dip as a last-minute deal was expected to break the impasse over the Mediterranean country’s bailout programme.
Spot gold was steady at $1,206.41 an ounce by 0253 GMT, after dropping 0.5 percent in the previous session. The metal has lost 1.8 percent for the week so far, also dipping below the key $1,200 level briefly on Wednesday.
Gold had initially seen some safe-haven bids as the uncertainty over the Greek crisis dragged on, but market concerns eased on hopes that a deal would be patched together. “The market appears to be dismissing the Greece impasse with little safe haven buying evident,” said ANZ analyst Victor Thianpiriya.
Germany rejected a Greek proposal for a six-month extension to its eurozone loan agreement on Thursday, saying it was “not a substantial solution”.
Berlin’s stance set the scene for tough talks at a crucial meeting of eurozone finance ministers on Friday, but some officials in other capitals saw the German response as tactical and forecast agreement by the weekend. Adding pressure was the U.S. dollar, which held firm after gaining against major currencies on Thursday, with traders still looking for the U.S. Federal Reserve to hike interest rates by June despite caution evident in the minutes from the latest Fed policy meeting.
That view was supported by strong economic data on Thursday showing the number of Americans filing new claims for unemployment benefits fell more than expected last week, signs the labour market was gathering steam. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies, while higher interest rates would also dent the appeal of non-interest-bearing gold. Liquidity was thin in Asia as No.2 consumer China and several other Asian countries were shut for the Lunar New Year holiday. Gold prices had received some support from Chinese buying ahead of the holiday, when gold is bought for gift-giving. “A lot hinges on the return of China next Wednesday as many participants are expecting them to be on the bid following their New Year festivities,” said Jason Cerisola, a precious metal trader at MKS Group.
“If this fails to be the case, the complex would likely continue its slide lower.”
(AGENCIES)
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