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Greece Austerity Vote

June 29, 2011 by USA Post 

Greece Austerity VoteGreece Austerity Vote, Gold futures dropped his slight gains Wednesday after the Greek parliament approved austerity measures, as investors were reluctant to sell holdings of the yellow metal, while Europe is still struggling to contain the debt crisis.

The most actively traded gold contract for August delivery, was recently formed and 6.20, or 0.4%, to 1506.40 and an ounce on the Comex division of the New York Mercantile Exchange. The contract traded at around 1508.50 and the troy ounce before the vote.

Parliament of Greece approved a package of budget cuts Wednesday, setting the stage for a package of financial support from the European Union and the International Monetary Fund. Concerns about the ability of the monetary union of Europe to avoid a moratorium Greek has sent investors seeking a haven in gold recently. Some investors consider gold as a safe place to park cash amid turmoil in currency or in other markets.

The measures were widely expected to pass, and gold futures showed only muted reaction. The euro area is still far from a permanent solution to the high levels of indebtedness in some Member States, market participants said, and the Greek parliament is scheduled to hold polls on Thursday in specific points of law of austerity and a plan to sell government assets.

“This uncertainty remains favorable for gold,” said Frank Lesh, a broker with FuturePath trade. “People want to be a long time the gold market.’s still a safe haven from the volatility of the currency, we have a lot of.”

Gold futures fell sharply at the end of last week, as a rising dollar and declining markets other, have encouraged traders to sell. A stronger dollar makes dollar-denominated futures more expensive for buyers using other currencies.

It is unlikely that investors aggressively selling gold, as concerns remain about the pace of global growth ahead of readings on the health of U.S. manufacturing and Europe scheduled for release this week, said Marc groud, ananlyst at Standard Bank in a note. The reports are expected “to confirm the weakness of the global economy, which should revive demand for the safety of precious metals,” said groud.

Other precious metals traded in New York were also higher after Wednesday’s vote.

Platinum for October delivery was recently up 1.4% in 1717 and the troy ounce. September delivery raised 0.9% palladium to 741.95 and ounce. July silver and delivery was 1.7% to 34.20 and ounce.

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