Forexpros – Gold futures were higher during European morning trade on Thursday, rising for the first time in three days as the previous day’s sharp decline created bargain buying opportunities for investors, while fears remained over a Greek exit from the euro zone.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,557.45 a troy ounce during early European trade, gaining 0.6%.
It earlier rose by as much as 0.9% to trade at a session high of USD1,563.15 a troy ounce. Prices fell to as low as USD1,533.25 a troy ounce on Wednesday, the lowest since May 16, when prices touched a 2012 low of USD1,526.95.
Gold futures were likely to find support at USD1,526.95 a troy ounce, the low from May 16 and near-term resistance at USD1,598.95, the high from May 21.
Sentiment remained under pressure after Wednesday’s informal summit of European Union leaders shed no new light on how the euro zone nations intend to tackle their debt crisis, including the threat of Greece’s possible exit from the monetary union.
European Union leaders discussed measures to bolster growth in the region and the proposed joint issuing of euro bonds but some members, including Germany, remained opposed, arguing that it would lessen pressure for heavily indebted countries to get their finances in order.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls. New elections are planned for next month.
Market sentiment was rattled Wednesday after former Greek Prime Minister Lucas Papademos warned that preparations for a Greek exit from the euro were being considered.
The ongoing Greece fears weighed heavily on the euro, which traded close to Wednesday’s 22-month low. The dollar index, meanwhile hovered close to its highest level since September 2010 earlier in the session.
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 in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for July delivery rose 1% to trade at USD27.81 a troy ounce, while copper for July delivery added 0.95% to trade at USD3.428 a pound.
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