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Gold declines as investors digest Greece election results

Published 01/26/2015, 04:56 AM
Updated 01/26/2015, 04:56 AM
© Reuters.  Gold futures edge lower after Greece elections

© Reuters. Gold futures edge lower after Greece elections

Investing.com - Gold edged lower on Monday, as traders digested the outcome of weekend elections in Greece, which saw anti-austerity party Syriza rise to power.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery dipped $10.40, or 0.8%, to trade at $1,283.20 a troy ounce during European morning hours.

On Friday, gold dipped $8.10, or 0.62%, to settle at $1,293.60.

Futures were likely to find support at $1,272.10, the low from January 20, and resistance at $1,308.80, the high from January 22.

Also on the Comex, silver futures for March delivery declined 30.5 cents, or 1.65%, to trade at $17.99 a troy ounce.

Syriza's leader Alexis Tsipras has pledged to renegotiate the terms of Greece's €240 billion bailout and reverse many of the austerity measures imposed by the European Union and International Monetary Fund, raising the possibility of a major conflict with euro zone partners.

The euro fell to an 11-year low of $1.1098 against the greenback before staging a rebound to $1.1249, as most market analysts expect Tsipras to eventually make compromises to appease international lenders and avoid the so-called "Grexit".

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.12% to hit 95.21, after touching a more than 11-year high of 95.77 on Friday.

In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.

Friday’s preliminary data on U.S. fourth quarter growth will also be in focus.

Gold is up almost 9% so far in 2015, while silver gained nearly 15%, as investors sought safety from volatility in global financial markets.

Elsewhere in metals trading, copper fell to the lowest level in more than five years on Monday, as traders were cautious after Greek anti-austerity party Syriza swept to victory in elections on Sunday

The March contract hit a session low of $2.420 a pound, a level not seen since June 2009, before trading at $2.460 during European morning hours, down 4.2 cents, or 1.67%.

The red metal is down approximately 13.5% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

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