PRECIOUS METALS: Gold Edges Up In Asia; Bernanke Comments Awaited
By Arpan Mukherjee Of DOW JONES NEWSWIRES
WELLINGTON (Dow Jones) --Precious metals were trading mixed in Asia Tuesday, with gold edging higher as concerns over a Greek default eased and market participants awaited U.S. Federal Reserve Chairman Ben Bernanke's comments after the conclusion of a two-day rate-setting meeting Wednesday.
Traders are waiting for the outcome of a no-confidence vote in Greece's parliament later Tuesday, as the government tries to push through austerity measures aimed at meeting a bailout-package precondition.
Spot gold, which opened weaker, was trading at $1,542.10/oz at 0523 GMT, $1.60 above the late New York price.
"Tonight's confidence vote in Greece will be crucial in continuing the stabilization in sentiment," IG Markets strategist Ben Potter said.
"A positive outcome will likely be taken as a further sign that Greece will receive its near-term funding," Potter said. This would be bearish for many markets, he added, though it would likely be bullish for gold.
Market participants said the euro-zone crisis is supporting gold, which is viewed as a safe-haven bet, especially in times of economic uncertainty.
Investors have moved to minimize risk in the face of Greece's debt woes, ETF Securities said in a note, adding that exchange-traded product flows show rising demand for precious metals, "particularly physically backed gold [exchange-traded commodities]."
In the absence of a definitive conclusion to the Greek debt situation, Bernanke's comments on the current round of quantitative easing will set the direction for the gold and financial markets for the rest of the week, analysts said.
Gold prices had rallied on the back of the Fed's $600 billion bond-buying program, known as quantitative easing, or QE, the current round of which is scheduled to end this month.
"The market is waiting for hints on QE2 and probably QE3," said a Hong Kong-based trader, who expects quiet trading ahead of Bernanke's comments.
http://online.wsj.com/article/BT-CO-20110621-701087.html
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