Forexpros – Gold futures rose to a two-day high on Wednesday, as the safe haven appeal of the precious metal was boosted amid fears a Greek referendum on the recent bailout deal will roil the region’s efforts to solve the debt crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,735.75 a troy ounce during European morning trade, jumping 1.4%.
It earlier rose by as much as 1.58% to trade at USD1,737.45 a troy ounce, the highest price since October 31.
Greek Prime Minister George Papandreou’s surprise call for a referendum on the country’s latest bailout package was unanimously passed by the Greek Cabinet late Tuesday.
Greece’s Interior Minister Haris Kastanidis said earlier that the planned referendum was likely to take place in December, while government spokesman Ilias Mosialos said, without elaborating, that it would be held as early as possible.
If Greece rejects the deal it would put the next tranche of aid to Greece in jeopardy, moving the country towards the brink of default and increasing the risk of contagion in global financial markets.
German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou were due to meet in Cannes later in the day, ahead of the Group of 20 summit scheduled to begin Thursday.
Global financial service provider Barclays said in a report earlier that the referendum was “a risky strategy that opens the possibility that the euro area package will unravel before it even begins.”
The report added that, given recent developments in the euro zone, “it is wise to stay close to the safe havens.”
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Meanwhile, the Federal Reserve’s Open Market Committee was to conclude its two-day policy meeting later in the day, with Fed Chairman Ben Bernanke conducting the bank’s post-policy meeting press conference.
Elsewhere on the Comex, silver for December delivery surged 3.48% to trade at USD33.87 a troy ounce, while copper for December delivery rallied 3.2% to trade at USD3.615 a pound.
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