Forexpros – Gold futures eased up on Thursday, trading at the highest level since early December as markets continued to monitor talks between Greece and its bondholders, while strong physical demand on China provided further support.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,749.15 a troy ounce during early European morning trade, edging 0.21% higher.
It earlier rose by as much as 0.54% to trade at USD1,754.85 a troy ounce, the highest since December 8.
Futures were likely to find support at USD1,727.55 a troy ounce, the low of January 31 and short-term resistance at USD1,760.35, the high from December 8.
Meanwhile, euro-denominated gold futures rose to EUR1,329.90, less than 4% away from the all-time high of EUR1,374.70.
Gold prices found support amid rumors of an imminent bond swap deal between Greece and its private creditors. An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default.
Meanwhile, markets were also eyeing Spanish and French government bond auctions later in the day. Spain was to offer as much as EUR4.5 billion in short to medium term debt and France was offering up to EUR8 billion.
Recent successful debt auctions showed the European Central Bank’s injection of nearly EUR500 million helped bolster demand.
Strong prices on the Chinese market lent further support. Gold for immediate-delivery on the Shanghai Gold Exchange, China’s largest physical gold market, reached CNY355.84 a gram, or USD1,756.03 an ounce, the highest price since December 9.
China is the world’s second largest gold consumer, trailing only India.
U.S. lender Bank of America said in a report Wednesday that it expected gold prices to climb to USD2,000 an ounce by the fourth quarter of 2012, up from a first quarter estimate of USD1,850, as the fundamentals for strong gold prices have not changed.
Elsewhere on the Comex, silver for March delivery shed 0.2% to trade at USD33.74 a troy ounce, while copper for March delivery fell 0.4% to trade at USD3.825 a pound.
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