June 15 (Bloomberg) -- Gold rose for the second straight day as Greek bailout talks stalled, driving the euro lower and boosting the appeal of the precious metal as a haven.
The euro fell as much as 2 percent against the dollar and European equities slid as the region’s finance ministers failed to reach an agreement on another rescue package. BNP Paribas SA, France’s biggest bank, and rivals Societe Generale SA and Credit Agricole SA may have their credit ratings cut by Moody’s Investors Service because of their holdings in Greece.
“All the bickering in Europe over the Greek bailout is making investors nervous,” said Matt Zeman, a strategist at Kingsview Financial in Chicago. “It sucks gold buyers back into the market.”
Gold futures for August delivery rose $1.80, or 0.1 percent, to settle at $1,526.20 an ounce at 1:54 p.m. on the Comex in New York. Earlier, the price climbed as much as 0.7 percent after gaining 0.6 percent yesterday. The metal has advanced 7.4 percent this year, reaching a record $1,577.40 on May 2.
S&P gave Greece the firm’s lowest credit rating, moving to CCC from B. Yields on 10-year Greek bonds approached 18 percent, the highest in the 17-nation euro area’s history.
“Gold is a safe-haven instrument,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. “With the movement in currencies, there’s a shift back into gold.”
Gold’s gains were limited as the dollar’s rally eroded the appeal of the metal as an alternative investment. Earlier, the commodity dropped as much as 0.6 percent.
‘Tug of War’
“We’ve got a tug of war in gold,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “If you’re holding gold in dollars, you’re selling into the rallies. If you’re holding gold in euros, you’re buying the dips.”
Silver futures for July delivery were little changed at $35.41 an ounce. The price has gained 14 percent this year.
Palladium futures for September delivery dropped $16.75, or 2.1 percent, to $776 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery fell $20.70, or 1.2 percent, to $1,774.20 an ounce.
--Editors: Patrick McKiernan, Daniel Enoch
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