Forexpros – Gold prices slipped in Asian trading Monday after Greeks voted in favor of pro-bailout parties in Sunday’s parliamentary elections, which allayed fears of a Greek exit from the eurozone.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded down 0.03% at USD1,627.65 a troy ounce.
Gold hit at a low of USD1,609.25 a troy ounce and a high of USD1,631.05 a troy ounce during the session.
Gold futures were likely to test support at USD1,609.25 a troy ounce, the earlier low, and resistance at USD1,634.35, the high from June 15.
Greek voters, though weary of austerity measures attached to rescue funding, appear willing to stick with the euro.
Conservative political party New Democracy emerged victorious in Greek elections on Sunday.
The party edged out the leftist Syriza, which favored scrapping austerity measures tied to bailout money.
Past Greek administrations agreed to austerity measures such as layoffs and spending cuts in exchange for bailout aid, and scrapping austerity threatened to halt the flow of rescue funding and could have opened the door to a Greek exit of the currency union.
New Democracy politicians favor sticking with the bailout, though they have said the country needs more growth-oriented policies going forward.
Leaders across Europe have complained that austerity policies have cut into growth rates and have exacerbated economic downturns.
New Democracy and PASOK, another pro-bailout party, appeared on track to garner enough votes at the time of writing to push through a coalition government in favor of sticking with the bailout.
The pro-bailout victory fueled expectations that Greece will avoid a messy exit from the eurozone, at least for now.
The news sent the euro rising and the dollar falling, which under typical trading would have sent gold rising, as the yellow metal trades inversely from the greenback.
But the New Democracy victory fueled optimism that investors snapped up euro positions, equities and other higher-yielding assets, sidestepping gold in the process.
Elsewhere on the Comex, silver for July delivery was up 0.02% and trading at USD28.745 a troy ounce, while copper for July delivery was up 0.48% and trading at USD3.431 a pound.
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