Gold Heads For A Weekly Gain On Hopes Greece Will Receive Bailout

Precious gold advanced for a second day, heading for a weekly gain, yet it remains below $1735, ahead of the awaited eurogroup finance ministers' meeting on Greece next week.

The shiny metal took advantage of expectations that Greece is coming soon to getting an approval for its next aid tranche after Chancellor Angela Merkel said on Wednesday an agreement to release aid to Athens was still possible next Monday.

On the other hand, an upbeat manufacturing report from China, which showed that the giant sector expanded for the first time in 13 months, and the euro area, which showed an ease in contraction in November to 46.2 from 45.4 in October, exceeding analysts'forecasts of 45.6, gave hopes there could be some improvement in the fourth quarter.

Yet, the metal's rally was stopped as it approached tough resistance around $1735 levels which it fell from last week, where it gained 1%, so far, this week.

Meanwhile, gold is trading around $1733.35 an ounce after touching a high of $1735.53 and a low of $1714.24, where the trading range for today is expected among the key support at $1700.00 and key resistance now at $1755.00.

Moreover, gold also benefited from the drop in the U.S. dollar which is girding for its biggest weekly decline since early October.

The dollar index, which tracks the dollar's movements versus a basket of major currencies, fell for a second day to hit a low of 80.55, compared to the day's opening of 80.70, noting that the breach of 80.88 levels, which represents SMA 200 level on the daily charts, yesterday paved the way for the dollar to record 0.71% drop so far this week.

However, crude oil did not take advance this week from the dollar`s drop and tensions in the Middle East as it steadied around $87.12 a barrel today.

Among other precious metals, sliver surged to $33.36 from the day's opening of $33.25, platinum rose to $15583.50 from $1581.50, and palladium inched up to $653.00 from $652.35.

Later in the day, a report may show that German business confidence may fall to three-year low to 99.5 in November, to record its seventh consecutive monthly drop, from 100 in October.