Forexpros – Gold futures were up for a third day on Monday, climbing to a three-day high as mounting fears over a possible Greek debt default and a sharp drop in global equities boosted the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,657.85 a troy ounce during late Asian trade, surging 2.19%.
It earlier rose by as much as 2.3% to trade at USD1,659.45 a troy ounce, the highest price since September 28.
Fears over a potential Greek default intensified over the weekend after the Greek government said Sunday it would not meet its deficit target this year, which could jeopardize the approval of the next tranche of bailout funds for the debt-laden country.
Inspectors from the European Union, the International Monetary Fund and the European Central Bank held discussions in Athens over the weekend and will soon decide whether the country is eligible to receive further financial assistance.
According to reports, Greece needs the latest round of aid to avoid running out of money by mid-October.
Adding to the concerns over the region’s debt crisis, German finance minister Wolfgang Schaeuble ruled out a larger German contribution to the European Financial Stability Facility than approved by parliament last week.
Gold traders will pay close attention to a meeting of finance ministers from the single currency bloc later in the day to discuss options for increasing the capacity of the EFSF.
Gold futures found further support as a sharp drop in global equities boosted the safe haven appeal of the precious metal. Asian markets tumbled, led by a 4.5% plunge in Hong Kong’s Hang Seng Index, while Germany’s DAX was down 2.3% shortly after the open.
Elsewhere on the Comex, silver for December delivery jumped 2.21% to trade at USD30.74 a troy ounce, while copper for December delivery plunged 3.01% to trade at a 14-month low of USD3.057 a pound.
Swiss lender UBS lowered its one-month silver price forecast to USD32 an ounce, down nearly 31% from a previous estimate. The lender also cut its three-month price target on the metal by 30% to USD35 an ounce.
Forexpros
