Gold higher for second Day on Weak US Data, Greek Worries

Gold futures edged up on Thursday, rising for a second straight day on soft U.S. economic data and renewed fears of a Greek default and potential exit from the eurozone.

Gold for June delivery on Comex GCM5, -0.39% rose $5.10, or 0.4%, to $1,206.40 an ounce. May silver SIK5, -0.39% advanced 15.1 cents, or 0.9%, to $16.43 an ounce.

Gold was buoyed Wednesday on a larger-than-expected drop in March industrial production and a soft Empire State manufacturing index.

“The gold price rose above the psychologically important $1,200 per troy ounce mark again yesterday on the back of more disappointing U.S. economic data, as this makes it less likely that the U.S. Federal Reserve will raise interest rates in June,” wrote strategists at Commerzbank in Frankfurt.

Meanwhile, concerns about Greece appeared to provide a modicum of support, analysts said, though investors overall appeared to be taking developments in stride.

Greek government bonds plunged Thursday, sending the yield on the country’s two-year debt above 27%.

Greece is in danger of running out of cash if bailout money from its international creditors isn’t released soon. But talks on extending the country’s aid program continue to drag on.

“The Greek crisis has reached a new crunch point amid signs that the Eurogroup will not grant desperately needed financial aid after next week’s meeting,” said Jennifer McKeown, senior European economist at Capital Economics, in a note.

“Greece might resort to IOUs and/or capital controls to avoid a disorderly default and keep the banks afloat for now. But such measures would offer a temporary solution at best and could be the first steps towards a euro-zone exit,” she said.

In other metals trade, July platinum PLN5, +0.04% rose $14.90, or 1.3%, to $1,171.50 an ounce, while June palladium PAM5, +0.66% rose $5.05, or 0.7%, to $772.15 an ounce.

May copper HGK5, +2.19% gained 6.35 cents, or 2.3%, to $2.776 a pound.

Source: MarketWatch

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