Melbourne - Gold was unruffled by the escalating crisis in Greece and failed to sustain an early gain as the dollar climbed to the highest level in almost one month, blunting demand. Silver, platinum and palladium declined.
Bullion for immediate delivery was at $1,168.31 an ounce at 11.42am in Singapore from $1,168.70 on Friday, according to Bloomberg generic pricing. In early Asian trade, it had advanced as much as 0.6 percent to $1,175.45 an ounce.
Greeks voted in a weekend referendum to reject further austerity measures required to win another bailout, spurring speculation the country will be forced to quit the euro zone. While the US currency strengthened after the result, bullion failed to hold onto gains. There would be only limited upside for gold in the case of a “no” vote as the dollar would likely be supported, ABN Amro Bank NV said last week, forecasting further losses as the Federal Reserve moves to raise rates.
“The strength of the dollar as a haven continues, and investors may look beyond Greece to Fed rate action,” said George Gero, vice-president of global futures at RBC Capital Markets in New York. “This may be a headwind for gold.”
With all votes counted, the result put support for the “no” camp at 61.3 percent, while 38.7 percent voted “yes”, according to the Interior Ministry. German Chancellor Angela Merkel will head to Paris on Monday for talks with President Francois Hollande to map out a way forward to contain the crisis.
Dollar rises
The Bloomberg Dollar Spot Index gained 0.3 percent to 1,190.96 after climbing to the highest level since June 8. The gauge is 18 percent higher over the past year on prospects for the first increase in US interest rates since 2006.
Gold in euros added as much as 1.8 percent to 1,068.87 euros an ounce, and last traded 0.8 percent higher at 1,058.65 euros. Priced in the common currency, bullion is 8.1 percent higher this year, while it’s 1.4 percent weaker in dollar terms.
The standoff in Greece hasn’t sparked much demand for gold, which is traditionally seen as a store of value amid crises. The metal fell in the past four quarters in the longest slump since 1997. Holdings in bullion-backed exchange-traded products fell 5.4 percent since this year’s peak in late-February and are near the lowest in six years, data compiled by Bloomberg show.
Gold for delivery in August rose as much as 0.9 percent from Thursday’s close to $1,174.40 an ounce on the Comex and traded at $1,167.30. Spot silver fell 0.5 percent to $15.6205 an ounce, reversing a 0.9 percent climb.
Platinum for immediate delivery slumped as much as 0.8 percent to $1,074.49 an ounce and was at $1,075.91, while palladium retreated as much as 1.2 percent to $677.25 and traded at $678.88. Both are used in catalytic converters to cleanse vehicle emissions.
* With assistance from Jasmine Ng in Singapore
Bloomberg