June 30 (Bloomberg) -- Gold may advance for a third day, heading for an 11th quarterly increase, as concerns about European debt crisis subsided after Greece passed austerity measures needed to avoid the euro area’s first default.
Immediate-delivery gold was little changed at $1,511.05 an ounce by 2:06 p.m. in Singapore. The price is up about 5.6 percent in the second quarter, reaching a record $1,577.57 on May 2. The August-delivery contract climbed 0.2 percent to $1,513.60 an ounce in New York. Cash palladium jumped to its highest in a week.
“Risk sentiment improved after the Greek parliament approved the austerity measures,” Stefan Graber, an analyst with Credit Suisse Group AG, said in a report today. “This helped the euro to strengthen against the dollar, which in turn attracted fresh investor interest into precious metals.”
Greek Prime Minister George Papandreou yesterday garnered enough votes for his 78 billion euro ($113 billion) package of budget cuts and state asset sales. Luxembourg’s Jean-Claude Juncker, who leads a group of euro-area finance ministers, said the Greek parliament’s vote paves the way for payment of the next aid installment from euro-area governments and the International Monetary Fund.
The dollar declined for a fourth straight day against a basket of six major currencies. Precious metals normally move inversely to the greenback. The euro was 0.5 percent stronger against the dollar at $1.45.
Protection of Wealth
Gold is up 6.5 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades, as investors sought protection of wealth amid Europe’s debt crisis.
Spot gold lost as much as 0.2 percent earlier amid speculation that the European Central Bank will raise interest rates next week. The metal is still down about 1.5 percent this month after declining 1.8 percent in May.
ECB President Jean-Claude Trichet said June 28 that policy makers are in “strong vigilance mode,” supporting expectations for an interest-rate increase at the bank’s meeting on July 7. The ECB raised its benchmark rate in April for the first time in almost three years.
Silver for immediate delivery climbed 0.5 percent to $35.055 an ounce. The price has dropped about 7 percent the past three months, set for the first quarterly loss in 10.
Cash palladium jumped as much as 1.5 percent to $762 an ounce, the highest since June 23. Spot platinum was 0.2 percent higher at $1,725.50 an ounce. Still, both metals are heading for second quarterly declines.
--Editors: Ovais Subhani, Richard Dobson
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