Gold rose for a third consecutive session on Tuesday as investors looked for the safety of the metal due to weakness in global equities and Greece concerns.
Comex gold for delivery in February gained 0.40% to $1 208.8 per troy ounce by 07:50 GMT, having shifted in a daily range of $1 201.6 and $1 211.9, its highest since December 18th. The precious metal edged up 1.50% on Monday to $1 204.0, breaking the key level of $1 200.
Asian stocks were hurt by falling oil prices and the political unrest related to Greeces future. Yesterday both the Dow Jones Industrial Average and S&P 500 fell the most during a session in around three months.
“There is a bit of talk about safe-haven buying given the spike in uncertainty regarding the future of the euro zone,” said MKS Capital trader James Gardiner, cited by the CNBC.
The euro was close to a near nine-year low against the dollar as speculations that Greece will exit the euro zone increased. The Syriza party, which is projected to win the elections on January 25, has promised to wipe out the majority of the countrys debt, while also leading Greece out of the 19-member region.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETF, marked their first increase in two weeks and climbed 1.61 tons to 710.81 tons. Holding changes typically move gold prices in the same direction. Assets fell 11% last year compared to a 41% drop in 2013.
Another sign of improving gold demand was brought by hedge and money managers, who increased their long positions in gold and silver futures during the week ended December 30, marking the first increase in almost a month.
Gold traded $5 on ounce higher than the global benchmark on the Shanghai Gold Exchange. Despite the premiums slight decrease compared to yesterday, it is still considered by metal dealers as a sign of greater demand.
Interest in the yellow metal is expected to stay strong at least until the end of the Lunar New Year holiday, celebrated in China on February 19-20th, when people exchange gold gifts or buy the metal for good luck.
However, investors are cautious about their gold position as the robust dollar could cap any rallies in the precious metal.
The US dollar index for settlement in March was up 0.07% at 91.555 at 07:51 GMT, holding in a daily range of 91.640 – 91.415. The US currency gauge gained 0.26% on Monday to 91.622. A stronger greenback makes dollar-denominated commodities more expensive for holders of foreign currencies and curbs their appeal as an alternative investment, and vice versa.
Pivot Points
According to Binary Tribune’s daily analysis, February gold’s central pivot point on the Comex stands at $1 196.4. If the contract breaks its first resistance level at $1 215.1, next barrier will be at $1 226.1. In case the second key resistance is broken, the precious metal may attempt to advance to $1 244.8.
If the contract manages to breach the S1 level at $1 185.4, it will next see support at $1 166.7. With this second key support broken, movement to the downside may extend to $1 155.7.
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