Gold gained for a second session on Tuesday as a fall in global equities, spurred by uncertainty surrounding Greece, prompted safe-haven demand for the yellow metal.
Comex gold for delivery in April was up 0.16% at $1 243.5 per troy ounce at 08:06 GMT, shifting in a daily range of $1 245.9-$1 237.9. The precious metal gained 0.56% on Monday and closed at $1 241.5.
Gold traders sought the safety of the metal as growing concerns that Greece will be the first country to leave the Eurozone dented demand for equities amid accelerating conflicts in Ukraine.
Greeces new government wants to lift austerity measures imposed by the previous administration as part of the countrys €110-billion bailout in 2010. Led by Prime Minister Alexis Tsipras, the new government will vote Tuesday on a minimum-wage increase, among other measures, that will put the nation in breach of the conditions on its anti-collapse deal inked with European countries and the International Monetary Fund.
However, the country may run out of funding by the end of the month as Mr. Tsiprass tactics face severe criticism from creditors, including Germany and its Chancellor Angela Merkel restating close-to-zero tolerance for Greeces demands.
European Commission President Jean-Claude Juncker also backed up Ms. Merkels position, boosting gold prices, in line with investors tendency to seek shelter in the yellow metal during political turmoil.
Meanwhile, the armed conflict in Ukraine can escalate even further, if peace talks fail to take control over the situation and the US distributes lethal defensive arms to the country.
President Barack Obama signaled on Monday the possibility to aid the Ukrainian government with weaponry, after his meeting with Ms. Merkel and despite her objections to the idea.
The US dollar index for settlement in March was up 0.05% at 94.625 at 08:10 GMT, holding in a daily range of 94.710-94.450. The US currency gauge fell 0.28% on Monday to 94.582. 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.
“With ongoing concerns surrounding Greece and a potential default, as well as the Ukraine crisis, gold should find support and hold above the 55-day moving average at $1 225 and 100 day moving average at $1 217 in the near term,” said Jason Cerisola, a metals dealer at MKS Group, cited by CNBC.
Consumer inflation in China falling to the slowest in five years also sounded a positive note for the yellow metal, with broad expectations for further monetary easing measures by the Peoples Bank of China circling in the air.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETF, remained unchanged on Monday at the highest level since late September at 773.31 tons. Changes in holdings typically move gold prices in the same direction.
Pivot Points
According to Binary Tribune’s daily analysis, April gold’s central pivot point on the Comex stands at $1 239.8. If the contract breaks its first resistance level at $1 245.3, next barrier will be at $1 249.0. In case the second key resistance is broken, the precious metal may attempt to advance to $1 254.5.
If the contract manages to breach the S1 level at $1 236.1, it will next see support at $1 230.6. With this second key support broken, movement to the downside may extend to $1 226.9.
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