Forexpros – Gold rose Tuesday as while hopes are high that European countries will approve a EUR130 billion bailout package for Greece, leaders were still not finished hammering out the details by the time Asian markets opened, which sent gold prices firming.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,736.55 a troy ounce, up 0.62%.
Gold futures were likely to test support at USD1,718.65 a troy ounce, Friday’s low, and resistance at USD1,739.15, Wednesday’s high.
European officials have signaled they are in agreement that Greece should get the rescue funding to avoid default.
European policymakers, however, were still discussing details concerning central bank participation in the deal as well as terms over restructuring Greece’s private-sector debt by the time Asian markets opened Tuesday.
Investors focused on Europe kept some gold at hand, as the entire bailout process has been fraught with delays for weeks now.
Furthermore, a decision by the Chinese central bank to scrap reserve requirements to spur increased bank lending and growth made the yellow metal more attractive.
Meanwhile, the European Central Bank is set to provide low-cost loans to banks to ease a credit crunch there, a process known as a Long Term Refinancing Operation, which further bolstered gold’s appeal.
Rising liquidity levels of paper currencies make gold an attractive hedge.
Elsewhere on the Comex, silver for March delivery was up 1.07% and trading at USD33.570 a troy ounce, while copper for March delivery was up 0.43% and trading at USD3.766 a pound.
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