Azernews.Az

By Bloomberg

Gold slipped as concerns over the standoff between the new Greek government and creditors eased even as China showed signs of demand before Lunar New Year holidays.

Greece offered compromises ahead of an emergency meeting with its official creditors on Wednesday as German Chancellor Angela Merkel remained unyielding over terms of the country’s bailout conditions. Gold rose 4.4 percent this year, partly as concerns that Greece could be forced out of Europe’s common currency increased the metal’s haven appeal.

Asian gold buying pushed volumes on the Shanghai Gold Exchange to the highest since April 2013. The start of the Lunar New Year is considered an auspicious time to buy gold, and with markets closed during the festival that begins next week, purchases are brought forward to allow stocking.

“The worst possible fears about the Greek situation has been priced into the market already so news on that front is having a lower impact,” Georgette Boele, a currency and commodities strategist at ABN Amro Bank NV, said in an e-mail from Amsterdam. “After the strong employment report from the U.S. on Friday, a possible Fed rate hike this year continues to hang over the market.”

Bullion for April delivery was 0.4 percent lower at $1,236.50 an ounce at 8:19 a.m. on the Comex in New York. Futures trading volume was 36 percent lower than the average for the past 100 days for this time of day. Gold for immediate delivery traded at $1,236.42 in London, according to Bloomberg generic pricing.

The odds of a Federal Reserve interest-rate increase as early as June rose on Feb. 6 after a government report showed payroll gains in January capped the biggest 3-month increase in 17 years. Rising rates dent the appeal of gold as it tends to offer returns only through price gains.

Holdings in exchange-traded products backed by gold increased for a fourth session on Monday to 1,678.2 metric tons, the highest in four months, according to data compiled by Bloomberg.

Silver for March delivery declined 0.9 percent to $16.915 an ounce in New York. Palladium was little changed at $778.55 an ounce, while platinum slipped 0.3 percent to $1,216.20 an ounce.