Gold futures rise modestly, amid mounting concern of Greek default

New York (Apr 15)  Gold futures increased modestly on Wednesday, amid mounting worries of a Greek default on its sovereign debt.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery edged up 6.80 or 0.57% to 1,199.40 in U.S. afternoon trading. Gold rallied slightly on Wednesday, following a minor two-day slump earlier this week.

Gold futures dipped to a daily-low of 1,188.30 just before U.S. markets opened, before reaching a session-high of 1,197.20 in the morning session.

Investors anticipating a collapse in negotiations between Greece and its euro zone creditors could scurry to gold as a safe haven. Greek officials face a Monday deadline from the euro zone's working group to present a revised list of reform measures deemed necessary to unlock a critical stimulus package. The financial lifeline is considered vital for Greece to stave off bankruptcy.

While delivering a speech in New York, German finance minister Wolfgang Schaeuble told the Council of Foreign Relations that he thinks it is unlikely that Greece will reach a deal with the euro zone at a meeting next week in Latvia or anytime in the coming weeks. Meanwhile, Greece's cash reserves could enter into negative territory next week after the deadline on Monday but ahead of the meeting in Riga, according to Reuters. In recent weeks, officials in Athens have reportedly hinted that it will meet its pension and wage obligations before repaying its debts to a troika of creditors.

When asked on Wednesday how a possible Greek default could roil markets, European Central Bank president Mario Draghi demurred, saying that he did not even want "to contemplate" the possible implications. Earlier this week, International Monetary Fund chief economist Olivier Blanchard said the euro zone has better mechanisms and firewalls in place than it did five years ago to guard against contagion if Greece leaves the euro zone.

EUR/USD remained flat at 1.0656 in U.S. afternoon trading, paring some of its losses following Draghi's press conference in Frankfurt. Earlier, the pair reached a session-low at 1.057 ahead of Draghi's comments.

Draghi appeared optimistic about the early success of the ECB's €60 billion a month quantitative easing program that launched last month and is scheduled to run through September, 2016. Draghi said the easing initiative has helped spur gradual economic recovery in the area, before adding that the ECB has had no problems meeting its targeted goal of purchasing government bonds. The ECB also left its benchmark interest rate unchanged at 0.05.

In spite of the uncertainty in Europe and throughout the globe in recent months, gold is down nearly 9% from mid-January when it spiked above $1,300 an ounce.

Elsewhere, silver for May delivery gained 0.109 or 0.67% to 16.27 an ounce.

Copper for May delivery rose 0.016 or 0.58% to 2.716 a pound.