Gold eases, pressured by Greek aid worry, weak equities
NEW YORK — Gold eased 0.2% on Monday, tracking weaker equities and commodities, as investors turned their focus back on eurozone talks to release aid to Greece after the metal rallied on Friday to its highest point in more than a month.
The S&P 500 index and crude oil both fell as eurozone finance ministers and the International Monetary Fund sought to unfreeze the second bail-out package for Greece, but they first need to agree if some of the official loans to Athens might eventually be forgiven to cut Greek debt.
Some investors took profits after a 1.5% rally, considered a technical breakout by analysts, which lifted bullion above its 50-day moving average for the first time in five weeks.
Trading volume was higher than usual for a second straight session. Turnover had been quiet in the last month as gold’s rally appeared to fade after the Federal Reserve said in September it would keep pumping stimulus money until the job market showed marked improvement.
"Most of the activity came from CTAs (Commodity Trading Advisors) and hedge funds who were either adding to longs or reversing their shorts. It seems that the expectations for the Fed’s planned actions are stronger now than they had been before the election," said Carlos Perez-Santalla, a broker at PVM Futures.
Spot gold fell 0.2% to $1,748.94 by 11:19am EST (4.19pm GMT), below Friday’s high of $1,754.10, its highest price since Oct 12.
US COMEX gold futures for December delivery fell $2.20 an ounce to $1,749.20.
Speculators also turned their attention to negotiations between the White House and Congress this week to avoid a series of automatic tax hikes and spending cuts worth $600bn set for January, which could tip the economy back into recession.
Among other precious metals, silver inched down 0.2% to $34.04 an ounce. Spot platinum was down 0.5% at $1,607.24 an ounce, while spot palladium edged up 0.1% at $662.97 an ounce.
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