Gold edges up from 5-week low on weaker dollar, Greece
London (Feb 12) Gold rose on Thursday, rebounding from a five-week low hit in earlier trade, on an easing dollar versus the Japanese yen and uncertainty over Greece's debt.
Spot gold fell to its lowest since Jan. 9 at $1,216.45 an ounce, before recovering to trade up 0.4 percent at $1,223.78 by 1050 GMT.
The metal lost 1.2 percent on Wednesday when the dollar hit a three-week peak against a basket of major currencies. It fell as much as 1 percent versus the yen on Thursday on a media report that more monetary stimulus from the Bank of Japan would be counterproductive.
"There is a great deal of uncertainty about the geopolitical and macroeconomic situation and gold continues to react to developments but as long as the Federal Reserve remains on course for tightening, the underlying trend is downwards," Macquarie analyst Matthew Turner said.
"At some point everyone would have priced in any Fed hike and then that may stop."
European shares rose as investors welcomed Sweden's central bank decision to cut interest rates below zero and an agreed ceasefire between Russia and Ukraine.
Financial markets had been under pressure as euro zone finance ministers were unable to agree with Greece a final statement or a way to continue talks until their next meeting on Monday to extend an international bailout.
Gold's sell-off for much of this week, despite the Greek debt crisis, suggests that markets are either expecting an ultimately positive result, or they may be discounting the country's possible exit as a net positive, said INTL FCStone analyst Edward Meir.
Gold is usually seen as an insurance against risk, with demand typically increasing in times of financial and political uncertainty.
But an interest rates hike by the U.S. central bank, which has kept rates near zero since 2008 to stimulate the U.S. economy, could further strengthen the dollar and in turn hurt demand for bullion, a non-interest-bearing asset.
Gold demand hit a five-year low last year as buying of jewellery, coins and bars failed to keep pace with 2013's elevated levels, particularly in major consumer China, the World Gold Council said on Thursday.
Silver rose 1 percent to $16.92 an ounce. Platinum gained 1.1 percent at $1,203.85 an ounce, while palladium was up 0.9 percent at $772.75 an ounce.