Gold Up on Greek Debt Pact
By Esther Tanquintic-Misa | November 27, 2012 5:56 PM EST
Prices of the safe haven yellow precious metal jumped 0.2 per cent to $1,751.80 an ounce after finance ministers in the heavily fiscal-affected eurozone and the International Monetary Fund (IMF) agreed to reduced Greece's long-term debt.
As of 12:12 p.m. in Singapore on Tuesday, spot gold was trading at $1,749.80 an ounce.
Finance ministers in the eurozone and the IMF agreed to give Greece more time to pay back the rescue loans it received from both groups. It likewise received a reduction in its interest rates.
"There is a lot of apathy towards the Europe situation right now," a Hong Kong-based trader told Reuters News.
"As investors once again gain confidence in Europe after leaders give Greece another chance, that will help the euro and in turn gold," analyst Wang Xiaoxi told Bloomberg News. "The market may try for a test of $1,800 this week."
But the Hong Kong-based trader believed prices of gold could rise further if the world's central banks would continue its respective monetary easing.
"The big picture is still driving people to precious metals, because they think the current problem is either not addressed, or won't be realistically solved other than by the current tactic, which is to have central banks and finance ministries working together to stimulate economies," he said.
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