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Gold up in Asia as investors eye Greece talks, news on banking sector

Published 07/12/2015, 07:03 PM
Updated 07/12/2015, 07:05 PM
© Reuters.  Gold prices up in Asia as Greece talks continue

© Reuters. Gold prices up in Asia as Greece talks continue

Investing.com - Gold prices gained on Monday in Asia as investors awaited concrete announcements on the status of Greece's banks and a third bailout program as talks in Europe dragged on through the weekend after some earlier hopes a deal was near.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose 0.34% to $1,161.80 a troy ounce. Also on the Comex, silver futures for September delivery gained 0.47% to $15.608 a troy ounce.

Elsewhere in metals trading, copper for September dropped 0.73% at $2.524 a pound.

Greece and its international creditors remain divided on the full terms for a new bailout agreement, reports said Sunday in Europe, with Germany adopting the toughest stance with demands that could prevent the speedy release of liquidity to the country's banking sector.

After a meeting between Greece's Prime Minister Alexis Tsipras, Germany's Chancellor Angela Merkel, France's President Francois Hollande and European Council President Donald Tusk, reports suggested that Greece needs to pass a series of measures and reforms in parliament by Wednesday and then discussions for a new lending agreement could start.

Such a move would deprive Greece from the European Central Bank's Emergency Liquidity Assistance support in the near term with the Greek banking situation in a dire situation.

One of the options on the table is a so called "bridge" loan that would carry Greece through September, enabling it to repay its IMF and ECB obligations to avoid default and at the same time negotiate for a new lending agreement, reports said.


Last week, gold ended the week lower on Friday, amid indications U.S. interest rates will start rising later this year and as investors continued to monitor developments surrounding talks between Greece and its international creditors.

Federal Reserve Chair Janet Yellen said in a speech Friday that the central bank is on track to raise interest rates at some point this year. The comments from Yellen are her most definitive to date on the timing of a 2015 rate hike.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.


Equity markets in China plunged sharply over the past three weeks, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.

Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

In the week ahead, China is to release data on second quarter growth, while monetary policy statements by the European Central Bank and central banks in Japan and Canada will also be in focus.

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