Gold Rises on Greece Debt Fears, Silver Gains
Source: Reuters (5/27/11)
"Gold may revisit a recent three-week top before profit taking kicks in."
Gold gained on Friday as mounting worries about a Greece debt default prompted buying from investors, while silver regained strength after tumbling from a two-week top in the previous session.
Gold may revisit a recent three-week top before profit taking kicks in, while silver—which has outpaced gold and is heading for its best weekly gain since late April at more than 7%—will continue seeing volatile price movements, analysts said.
"It's still the expectation that there's a possibility for a Greece default and a greater safe-haven buying coming to the precious metal such as gold and silver," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore
"With gold prices actually close to a 3-week high, then perhaps you could also see some profit taking and some closing of the bullish position later in the day," she said.
"I guess for silver, it's a lot of speculation and a lot of volatile movements. I would expect that to continue. We're not seeing the longer-term investors really coming back into the market yet," said Ong of Phillip Futures.
"It's pretty much speculation and volatility going forward."
Precious metals prices continued to be supported by jitters over Greece's debt problems that could have a big ripple effect across other high risk-European countries struggling with gaping fiscal deficits.
The International Monetary Fund could withhold the next slice of aid to Greece due next month, the head of euro zone finance ministers said on Thursday, spooking markets with the possibility of a default.
Overall trading was slow in the bullion market ahead of the U.S. Memorial Day holiday weekend. COMEX June gold futures rose $3.3 an ounce to $1,526.1 an ounce.
A softer dollar also underpinned sentiment.