Gold fell to a 19-week low as the dollar rose after Greek Pasok party leader Evangelos Venizelos said new elections will be held after attempts to form a government failed, curbing demand for the precious metal.
A second Greek election threatens to extend the political gridlock that has left the country without a government since the vote on May 6. Bullion erased its gains for this year yesterday as concern that Europe’s debt crisis is deepening boosted the dollar. Before today, the greenback gained 2.3 percent this month against a basket of six currencies, while gold retreated 6.2 percent.
“People want to move to cash because of the Greek political impasse,” Sterling Smith, a market analyst at Country Hedging in St. Paul, Minnesota, said in a telephone interview. “The dollar’s strength continues to hurt gold.”
Gold futures for June delivery slipped 0.2 percent to settle at $1,557.10 an ounce at 1:42 p.m. on the Comex in New York. Prices earlier dropped to $1,546.80, the lowest since Dec. 30.
Silver futures for July delivery dropped 1 percent to close at $28.08 an ounce on the Comex. The metal fell as low as $27.895, the lowest since Dec. 30.
On the New York Mercantile Exchange, palladium futures for June delivery rose 1 percent to $601.10 an ounce, the first gain in three sessions. Platinum futures for July delivery increased 0.3 percent to $1,446.50 an ounce. The gain was the first in seven sessions.
To contact the reporter on this story: Debarati Roy in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com