Gold Ends Higher Amid Concerns Over Greece
Washington (Feb 9) Gold futures rebounded to end higher on Monday, as the dollar trended lower amid anxiety over a potential Greek exit from the eurozone and timing of the US Federal Reserve's rate hike following the better-than-expected US jobs report last week.
In Greece , Prime Minister Alexis Tsipras reaffirmed his government has no plans for an extension of the bailout program, but would seek a gradual roll-back of austerity. He also noted that his campaign against austerity is 'irreversible' and the first priority is to tackle the big wounds of the bailout.
Greece's bailout program offered by the European Commission , the European Central Bank and the IMF is set to expire on February 28 . Greece has tried to renegotiate the bailout terms, but the EU has rejected the request saying that the bailout conditions were generous. Meanwhile, the ECB has instructed Greek banks not to access credit by using Greek government bonds or bonds guaranteed by the government.
The precious metal has rebounded after a few weeks of losses, amid a strong dollar and increased risk appetite, along with indications that the Federal Reserve will raise interest rates by mid-year.
The speculation of a hike in rates follows a number of Fed officials stating last week that the US economy is on solid footing and low inflation due to collapsing energy prices would prove temporary.
Gold for April delivery, the most actively traded contract, gained USD6.90 or 0.6% to settle at USD1,241.50 an ounce on the Comex division of the New York Mercantile Exchange on Monday.
Gold for April delivery scaled an intraday high of USD1,243.60 and a low of USD1,234.40 an ounce.
On Friday, gold ended at USD1,1,234.60 an ounce, down USD28.10 or 2.2%, after some better-than-expected US jobs report lifted the dollar higher, strengthening the prospects of a US interest rate hike by mid-year.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 773.31 tons on Monday from its previous close on Friday.
The dollar index, which tracks the US unit against six major currencies, traded at 94.51 on Monday, down from its previous close of 94.69 late Friday in North American trade. The dollar scaled a high of 94.88 intraday and a low of 94.39.
The euro trended higher against the dollar at USD1.1331 on Monday, as compared to its previous close of USD1.1315 late Friday in North American trade. The euro scaled a high of USD1.1361 intraday and a low of USD1.1271 .
On the economic front, China's trade surplus rose to a record high in January as imports plunged at the fastest rate in more than five years and export unexpectedly declined, data from the customs office showed Sunday. The trade surplus came in at USD60 billion in January, more than the USD48.20 billion expected by economists. In December, the surplus was at USD49.61 billion . The surplus for January beat the previous record of a USD54.4 billion surplus recorded in November.
Germany's trade surplus, exports and imports reached record highs in 2014, provisional data from Destatis revealed Monday. Exports increased 3.7% to EUR 1,133.6 billion in 2014 and imports climbed 2% to EUR 916.5 billion . In 2014, export and import levels were higher than the previous all-time highs recorded in 2012.
The German foreign trade balance showed a surplus of EUR 217.0 billion in 2014, which was the highest value ever recorded. A year ago, the surplus totaled EUR 195 billion .
Eurozone investor sentiment rose sharply to its highest since May 2014 on the back of the quantitative easing announced by the European Central Bank , data from the think tank Sentix showed Monday. The investor confidence index for February rose to 12.4 from 0.9 in January. This was the highest score since May 2014 and far exceeded an expected score of 3.
The Organization for Economic Cooperation and Development's (OECD) leading index signaled a stable growth momentum in the region and a positive change in growth momentum in the euro area.
The OECD composite leading indicator rose to 100.5 in December from 100.4 in November, indicating stable growth momentum in the US, Canada , Japan , China and Brazil . While the UK index pointed to an easing in growth momentum, the euro area showed signs of positive growth momentum, particularly in Germany and Spain .
The indicator for India suggested firming growth, while in Russia the index continues to point to a loss in growth momentum.
Confidence among Japanese consumers improved for the second straight month in January, albeit less than expected, data from the Cabinet Office showed Monday. The consumer confidence index rose by 0.3 points to 39.1 in January from 38.8 in the previous month. Economists had forecast a 39.3 score for the month.