Forexpros – Gold futures rose for the first time in six days on Wednesday, tracking movements in the currency market as traders awaited further developments surrounding Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,729.55 a troy ounce during early European morning trade, climbing 0.69%.
It earlier rose by as much as 0.8% to trade at a two-day high of USD1,731.65 a troy ounce.
Futures were likely to find short-term support at USD1,713.95 a troy ounce, Tuesday’s low and resistance at USD1,735.25, the high from February 13.
Gold prices moved higher in tandem with the euro in early action on Wednesday.
Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices.
The euro gained against the U.S. dollar on hopes that Greece can deliver on a pledge to implement harsh austerity measures while comments from the head of China’s central bank also lent support.
People’s Bank of China Governor Zhou Xiaochuan said earlier that he believes the euro zone’s challenges can be solved and that he fully supports measures taken by the European Central Bank during the crisis.
He also said that China will become more involved in efforts to resolve the crisis through mechanisms such as the European Financial Stability Facility, the euro zone’s rescue fund.
Meanwhile, investors continued to monitor developments surrounding Greece. Euro zone finance ministers cancelled a meeting planned for later Wednesday in Brussels and will hold a teleconference call instead to discuss the approval of Greece’s second bailout.
Sentiment was supported by reports quoting Greek government officials as saying party leaders would promise by Wednesday to implement deep spending cuts and other reforms.
Greece has a EUR14.5 billion bond repayment due on March 20 and requires the bailout funding in order to be able to make that payment and avoid a messy default.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 79.31.
Gold is priced in U.S. dollars and when the greenback weakens, the dollar-priced commodity becomes less expensive to investors who use other currencies.
Elsewhere on the Comex, silver for March delivery rallied 1.15% to trade at USD33.73 a troy ounce, while copper for March delivery rose 0.9% to trade at USD3.849 a pound.
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