Forexpros – Gold futures were higher for the third consecutive day during European morning trade on Monday, extending last week’s gains to hit a seven-day high after a pledge of support for keeping Greece in the euro zone following a weekend summit of G8 leaders failed to ease investors’ jitters.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,597.35 a troy ounce during early European trade, gaining 0.35%.
It earlier rose by as much as 0.5% to trade at USD1,598.95 a troy ounce, the highest since May 10. Prices touched USD1,526.95 a troy ounce on May 16, the lowest since December 29, 2011.
Gold futures were likely to find support at USD1,526.95 a troy ounce, the low from May 16 and resistance at USD1,639.05, the high from May 8.
A weekend Group of Eight meeting in Washington D.C. brought together leaders of the world’s most industrialized nations, who expressed support for keeping Greece in the euro zone. But investors remained on edge as no clear cut solution to the euro zone’s ongoing debt crisis was presented at the weekend summit.
Market sentiment was set to remain fragile as the debt-laden country called for new elections to take place on June 17. The vote will likely determine whether the highly indebted country remains in the single currency area.
Meanwhile, investors were also eyeing a first meeting between German Finance Minister Wolfgang Schaeuble and his newly installed French counterpart, Pierre Moscovici, in Berlin later Monday, as European Union leaders were preparing for a summit in Brussels on May 23.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets in recent months.
Gold futures were rattled in the early part of last week, falling to the lowest level since the start of the year on Wednesday, as speculation over the possibility of a Greek exit from the euro zone intensified after talks aimed at forming a coalition government failed.
But futures recovered in the final two trading days of the week, rallying nearly 3.2% to post its largest two-day gain since October, as investors returned to the market to seek cheap valuations.
Market analysts noted that gold prices will likely face some resistance if they attempt to break above USD1,630 an ounce in the coming sessions as Europe’s debt woes will likely push investors to seek the relative safety of the U.S. dollar at the expense of the yellow metal.
Elsewhere on the Comex, silver for July delivery shed 0.4% to trade at USD28.60 a troy ounce, while copper for July delivery advanced 1% to trade at USD3.503 a pound.
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