Gold gained for a second day in London as concern about Greece's debt woes and a weaker dollar spurred demand for the metal as an alternative investment.
The dollar fell versus the euro on speculation Greece's debt crisis won't prevent the European Central Bank from raising interest rates next week. Police fired tear gas to disperse protesters in Athens as labour unions shut down government services before Greece's parliament votes on an austerity package needed to secure more financial aid.
Gold "might be in a win-win situation as if the vote is passed the dollar will likely fall and that will boost metal prices, while if the vote fails then safe-haven buying could kick in," William Adams, an analyst at Basemetals.com in London, said.
Immediate-delivery gold gained $7.95 (Dh29.18), or 0.5 per cent, to $1,509.35 an ounce. The metal typically moves counter to the greenback. Gold for August delivery was up 0.6 per cent at $1,509.70 an ounce on the Comex in New York.
Bullion rose to $1,506 an ounce in the morning "fixing" in London, used by some mining companies to sell output, from $1,499 at Tuesday afternoon's fixing.
ECB President Jean-Claude Trichet said that policymakers are in "strong vigilance mode," supporting expectations for an interest-rate increase at the central bank's meeting on July 7. The ECB raised its benchmark rate in April for the first time in almost three years, lifting it by a quarter point to 1.25 per cent.
Gold is up 6.2 per cent in 2011 after climbing the past ten years, the longest run of gains in at least nine decades. Europe's debt crisis helped bullion reach a record $1,577.57 on May 2.
From / Gulf News