London 23/11/2012 - Gold edged higher on Friday as the euro strengthened to three-week highs on news of positive developments regarding Greece's bailout discussions.
Spot gold was last quoted at $1,734.00/1734.16, up $4.20 from Thursday's close. The yellow-metal has traded in an $8.00 range this morning.
Greece's lenders have decided on new ways to reduce its debt. But they still need to find a way to fill a 10 billion euro gap to gain the support of the International Monetary Fund.
This helped the euro rose to touch 1.2915 versus the dollar, settling recently around 1.2890.
Market players will be focusing on next Monday’s meeting of the eurogroup finance ministers, which will discuss the Greek bailout.
"The market has not changed very much, these markets are not exciting and gold has been trading in tight trading ranges for a while. We need more clarity on the US fiscal cliff. The US fiscal cliff needs to raise the debt ceiling, which will in turn provide a relatively short window of opportunity," Natixis head of commodity research Nic Brown said.
"The eurozone crisis has escalated over time - gold bugs have almost put the 'looming crisis' to one side as they are more concentrated on the US fiscal cliff," Brown added.
Market participants have concerns whether the US can sidestep this looming fiscal crisis. The market remains hopeful that it will avoid the automatic triggering of $607 billion in spending cuts and new taxes.
Earlier this week, Federal Reserve chairman Ben Bernanke urged a quick resolution to talks - he said that concerns over how budget talks will be concluded was already affecting growth.
Volumes are expected to remain thin today, following Thursday's US Thanksgiving Day holiday.
Datawise this morning, German Final GDP for September on a quarter-on-quarter basis came in as expected at 0.2 percent. Meanwhile, the German lfo Business climate index for November was 101.4, against a predicted 99.6. Italian retail sales for September on a month-on-month basis rose 0.1 percent, against a forecast increase of 0.3 percent.
In the other precious metals, silver hit a one-month high yesterday at $33.46 and was last at $33.44/33.49, down eight cents. Platinum at $1,576/1,576 was down $1 from Thursday's close. Sister-metal palladium was last quoted at $652.60/658.60, up a mere 60 cents from Thursday's close.
(Editing by Martin Hayes)