Gold prices lift on Greek risk

Frankfurt (Mar 9)  Gold prices in Europe were higher on Monday, on the back of reports that Greece's financial troubles are more serious than expected.

Spot gold was trading at $US1,173.89 a troy ounce, up 0.6 per cent, in morning European trade.

"It would appear that the markets are still unable to ignore the Greek situation -- according to media reports at the weekend, the country's financial state is evidently more precarious than previously assumed, meaning that Greece could require fresh funds sooner than anticipated," Commerzbank said.

The uncertainty around Greece's future within the eurozone is beneficial to gold. As the metal is considered a safe haven for investors to stash their cash during periods of high risk, the possibility of a Greek exit from the eurozone is boosting demand and prices.

However, the outlook for the yellow metal is seen to lose its shine.

"Gold is likely to trade lower on the back of a stronger dollar and weaker euro. We initiate a short position on gold, with a view that prices will test $US1,100/oz in the short term," ANZ Research said.

The precious metals were mostly higher as the week kicked off. Silver was up 0.5 per cent at $US15.969 an ounce, platinum was down 0.3 at $US1,153.70 an ounce, and palladium was up 0.5 per cent at $US820.00 an ounce.

Source: BusinessSpectator