Gold prices broadly flat, Greece eyed
Frankfurt (Feb 10) Gold prices were broadly flat in Europe on Tuesday, with prices expected to rise because of the risk posed to the eurozone by Greece.
Spot gold was trading at $US1,237.91 a troy ounce, down just 0.08 per cent, in mid-morning European trade.
The yellow metal "should rise above this threshold soon, however, as the uncertainty over Greece is likely to contribute to solid demand for gold. The situation between the Greek government and its creditors remains deadlocked," Commerzbank.
Greece's newly elected leftist party, Syriza, is anti-austerity and has effectively said it wants to renegotiate the terms of the country's financial bailout program. Germany, however, insists that Greece implements the conditions tied to its agreed program.
Gold is viewed as a safe-haven metal and is considered a hedge against socio-political risk. As a result, in times of uncertainty demand tends to spike and prices shoot up.
There is an increasing number of voices joining the chorus that Greece's days within the euro area could be numbered. In market terms, this is good news for gold.
"We are used to the different political warmongering but...[moves] by the Syriza party had a different tension to it. This increased uncertainty should provide some support for gold prices," Phillip Futures investment analyst Howie Lee said.
Other precious metals were lower. Silver was down 0.9 per cent at $US16.811 an ounce, platinum was down 0.1 per cent at $US1,212.60 an ounce, and palladium was down 0.4 per cent at $US774.50 an ounce.