COMMODITY PRICES

» More

TOP HEADLINES

» Markets | Economy | Companies

- Manufacturing May Be Poised for a Quantum Leap

FEATURED SLIDESHOWS

» More

Million Dollar Homes
See what $1 million can buy across different housing markets in the U.S.
Strategies For Business Financing
See the various forms of funding, and what entrepreneurs have used to build successful companies.
7 Electric ‘Super Cars’
Take a peek at some of the most luxurious electric cars available on the market.

MOST POPULAR

News

Blog Posts

Videos

SPECIAL REPORTS

» More

- The Facebook IPO
  Get up-to-the-second breaking news on the Facebook IPO, including in-depth coverage, expert analysis, and Facebook’s stock price.

HOT ON FACEBOOK

Gold Settles Near $1725 on Greek Bailout Uncertainty

Published: Friday, 10 Feb 2012 | 4:27 PM ET

Text Size

By: Reuters

Gold fell on Friday, hurt by a slide in the euro after a Greek party leader said he couldn't back the 130-billion euro bailout deal the country needs to avoid going bankrupt, which comes at the cost of painful austerity measures.

Gold bars
Tom Grill | Iconica | Getty Images

Euro zone finance ministers are still seeking further measures from Greece before signing off on a second bailout.

Spot gold [XAU= Loading... () ] was last down .72 percent at $1,718.54 an ounce.

U.S. gold futures [GCCV1 Loading... () ] for April delivery settled down $15.90 to $1725.30.

The euro [EUR= Loading... () ] fell after the leader of the far-right party in Greece's coalition said he could not back the bailout agreement, reigniting worries about the risk of a chaotic default.

"Today, the market is in risk-off mood again with stock markets weaker as well," said Alex Zumpfe, a trader at Heraeus precious metals house. "Gold is facing some selling pressure after support levels didn't trigger sufficient buying interest.

"Physical buying evolved on the lows but were obviously not strong enough to support the market," he added. "Technically, it cannot be ruled out that further weakness might occur if the 1,710 area doesn't hold."

Risk aversion drove safe-haven German bonds sharply higher, while European shares fell, dragged lower by banks on concerns about the outcome of the euro zone debt crisis.

Gold is still up 10 percent this year as traders bet U.S. monetary policy will remain accommodative this year. It rose above $1,750 an ounce on Thursday after Greek leaders agreed to a deal on reforms needed to avoid a default, lifting the euro.

Eurogroup chairman Jean-Claude Juncker said a further 325 million euros ($428 million) of spending cuts needed to be found by Greece and, with Greek elections looming, political assurances were needed that the plan would be implemented.

European shares fell, dragged lower by banks on concerns about the outcome of the euro zone sovereign debt crisis, while safe-haven German government bonds rose.

Oil prices slipped on Friday in line with other markets, though they are expected to remain firmly underpinned by ongoing tensions with Iran, the world's fourth-largest crude oil producer.

Indian Demand Firms

Physical gold demand from the world's biggest bullion consumer, India, improved on Friday as prices eased back from two-month highs. “Demand is better than the last two days as prices have cooled off a bit,” said one bullion dealer in Mumbai.

Also positive for prices, the biggest operator of U.S. futures exchanges, the CME Group [CME Loading... () ], on Thursday lowered trading margins for a range of commodities contracts, including gold, silver, and platinum.

“In August and September of last year, CME almost doubled the margin within just a few weeks, thereby contributing to the sharp fall in the price of gold,” Commerzbank said in a note.

Indonesia is to ban exports of some raw materials, including gold and silver as well as base metals like copper and tin, from 2014, the Mineral Resources Ministry said on its website.

Indonesia was the world’s seventh-largest gold producer last year with output of 115 metric tons, according to metals consultancy GFMS, and produced 6.9 million ounces of silver in 2010, making it Asia's fourth-largest miner of the metal.

Silver [XAG= Loading... () ] ended down 1.33 percent at $33.43 an ounce. Spot platinum [XPT= Loading... () ] was up 0.11 percent at $1,650.13 an ounce, while spot palladium [XPD= Loading... () ] was down 1.33 percent at $697.35.

President Jacob Zuma squashed more than two years of talk on Friday about the nationalization of South Africa’s massive mining sector, saying state control or ownership of the mines in the world’s biggest platinum producer could not work.

However, South Africa’s mining sector — the fifth-biggest in the world by value — faces the prospect of higher taxes and royalties as the government tries to squeeze out better returns for the country’s 50 million people.

“Had the ANC promoted a pro-nationalization agenda we believe the impact on PGM prices would have been very bullish as foreign investment and quite possibly professional expertise would have deserted the country, with a commensurate negative impact on production,” said HSBC in a note. “As it stands we believe the report is still modestly bullish. Higher taxes on producers are bound to curb investment and production to some degree, all other factors being equal.”