Forexpros – Gold futures rose to a six-week high on Monday, as political uncertainty in Greece and concerns over rising Italian borrowing costs boosted the safe haven appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,768.65 a troy ounce during European morning trade, gaining 0.71%.
It earlier rose by as much as 1.1% to trade at USD1,774.65 a troy ounce, the highest price since September 22.
Over the weekend, Greek Prime Minister George Papandreou agreed to step down after an aborted plan to hold a national referendum on a European bailout package.
Papandreou will meet with opposition leader Antonis Samaras later in the day to decide the head of the new government, as well as its mandate and timeframe.
Investors were also focusing on Italy, after the country’s borrowing costs rose to a euro-era record on Friday, fanning fears that the region’s debt crisis will spill over to the single currency bloc’s third largest economy.
At the conclusion of a two-day summit in Cannes Friday, Italian Prime Minister Silvio Berlusconi agreed to allow the International Monetary Fund to monitor the country’s progress on cutting its deficit and implement economic reforms.
However, the agreement failed to ease market jitters after Berlusconi said he could cancel the IMF inspections “whenever he wanted” in a speech following the summit.
Berlusconi’s government faces a key parliamentary vote on Tuesday, amid growing opposition from within his own political party.
Meanwhile, German newspapers reported over the weekend that leaders at the G-20 had floated the idea that the Bundesbank’s gold reserves could be used to underpin the European Financial Stability Facility, but that the plan was a quickly rejected by senior German officials.
Elsewhere on the Comex, silver for December delivery eased down 0.1% to trade at USD34.04 a troy ounce, while copper for December delivery dropped 1.44% to trade at USD3.513 a pound.
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