Tuesday, November 1, 2011

impact Greek referendum gold prices down november 2 2011

impact Greek referendum gold prices down november 2 2011 : Gold prices firmed on Tuesday, riding on renewed safe-haven demand as fears about Greece's debt crisis returned after its government shocked the markets with a call for a referendum on a European Union aid deal.

Greece's cabinet decided early on Wednesday to back PrimeMinister George Papandreou's proposal for a referendum on the EU deal, a government spokesman said.

U.S. gold GCcv1 rose as much as 1 percent to $1,729.4 an ounce, and eased slightly to $1,727.20 by 0314 GMT. Spot gold inched up 0.4 percent to $1,725.09.

Meanwhile, the euro wallowed near a three-week low against the dollar, and Asian shares wiped out gains made during the huge relief rally last week that followed an agreement among European leaders to help reduce Greece's huge debts.

"People who hadn't realised before should realise now that Europe's issues will continue to be troublesome and difficult," said Jeremy Friesen, commodities strategist at Societe Generale in Hong Kong.

"There will continue to be risks, which will put more and more pressure on central banks, especially the ECB (European Central Bank), to be more accommodative, which will be bullish for precious metals."

Technical analysis suggested mixed signals for spot gold for the day, as the rise from the previous session's low of $1,681 was too sharp, said Reuters market analyst Wang Tao.

Eyes are on a news conference by the U.S. Federal Reserve chief Ben Bernanke later in the day after a two-day policy meeting. The Fed looks set to take a breather from monetary stimulus measures on Wednesday, even if financial market turbulence heightens the chances of action later.

Investors will also closely watch the rate decision by the European Central Bank due Thursday, just as a Group of 20 summit is to take place and likely to pressure Europe on the debt crisis solution.
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