Investing.com -- Gold futures edged up on Tuesday reversing some of its losses during the previous session, as a potential Greek default on its sovereign debt remained in focus.
On the Comex division of the New York Mercantile Exchange, gold for June delivery rose 8.10 or 0.68% to 1,201.80 a troy ounce. Gold plunged to a session-low of $1,192.60 in U.S. morning trading before steadily moving higher to exceed the $1,200 level in the afternoon session.
On Monday, gold futures plummeted by more than $14 an ounce to $1,190.80 on mounting Greek concerns, before slightly rebounding in U.S. afternoon trading. Gold has encountered a volatile, see-saw few weeks of trading, as uncertainty in Greece coupled with speculation of the Federal Reserve's first interest-rate hike since 2009 has spooked global markets.
Gold futures fell to a four-month low of $1,151.60 on Mar. 11 after a strong U.S. jobs report for February signaled an increased possibility of lift-off by the Fed. A rash of soft economic data over the next few weeks, however, inspired a growing belief that the Fed could delay such a hike until its Federal Open Markets Committee meeting in September or even possibly past the fall. On April 6, gold soared to $1,218.60, reaching its highest level since mid-February.
Gold is viewed as a safe haven in periods of economic chaos.
On Tuesday, Jeroen Dijisselbloem, the head of the euro group of prominent finance ministers, steadfastly insisted that Greece must meet all of its obligations in the coming weeks if it wants to remain in the euro zone. Next month, Greece owes the International Monetary Fund a payment of more than €773 million on a loan under the IMF's first Greek bailout in 2010, before it must meet two separate obligations of more than €300 million to the IMF in June.
By late-July, Greece owes an additional €3.45 billion to the European Central Bank for bonds related to a 2012 default.
"The money is starting to run out," Dijisselbloem told European broadcaster RTL.
Dijisselbloem remained adamant that every effort must be undertaken to prevent a Greek exit from the euro zone, a move that has earned the popular moniker "Grexit," in recent weeks.
"If Greece leaves the euro zone you would get very dangerous instability," he added. "It's in the interests of Greece and the euro zone as a whole to avoid that."
The sentiments were echoed on Tuesday by Jason Furman, the chairman of the White House Council of Economic Advisers. It is commonly thought by a number of economists that a Greek departure from the euro zone could have a contagion effect, impacting countries such as Spain, Italy and Portugal whose yields on its government debt have slipped into negative territory.
"A Greek exit would not just be bad for the Greek economy, it would be taking a very large and unnecessary risk with the global economy just when a lot of things are starting to go right," Furman said in an interview with Reuters.
Athens officials on Monday reportedly issued a decree to local governments forcing them to transfer all cash balances to the Greek Central Bank ahead of Friday's critical meeting of euro zone finance ministers in Latvia. Greece prime minister Alexis Tsipras is expected to present a revised list of reform measures that could unlock a vital financial lifeline to the cash-strapped country. The effort could raise about €2 billion, according to multiple reports.
Elsewhere, Silver futures for May delivery gained 0.106 or 0.67% to 15.997 a troy ounce.
Copper for May delivery fell 0.032 or 1.16% to 2.701 a pound, amid a bond default in the Chinese construction sector. Kaisa Group Holdings, a Shenzen-based company, became the first Chinese property developer to default on its dollar bonds, after it failed to meet a coupon payment on two notes on Monday.
China accounts for more than 40% of the world's copper consumption.