Gold rises on Greece debt fears, silver gains 2 pct

Fri May 27, 2011 6:04am GMT
 

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold rose on Friday as mounting worries about a Greece debt default prompted buying from investors, while silver gained more than 2 percent after tumbling from a two-week top in the previous session.

Gold may revisit a recent three-week top before profit taking kicks in, while silver -- which has outpaced gold and is heading for its best weekly gain since late April at more than 7 percent -- will continue seeing volatile price movements, analysts said.

Spot gold added $6.29 an ounce to $1,524.39 an ounce by 0517 GMT as Greece fights to avoid a debt restructuring. Gold touched a record around $1,575 in early May.

"It's still the expectation that there's a possibility for a Greece default and a greater safe-haven buying coming to the precious metal such as gold and silver," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore

"With gold prices actually close to a three-week high, then perhaps you could also see some profit taking and some closing of the bullish position later in the day," she said.

Silver rose 41 cents to $37.65 an ounce in thin trade after hitting a high around $38. It had rallied to a two-week high at $38.84 on Thursday before hitting a low around $36 as speculators booked profits. Silver struck record at $49.51 an ounce in April.

"I guess for silver, it's a lot of speculation and a lot of volatile movements. I would expect that to continue. We're not seeing the longer-term investors really coming back into the market yet," said Ong of Phillip Futures.

"It's pretty much speculation and volatility going forward."   Continued...

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