Gold climbed up together with other guaranteed assets after the debt crisis in Greece apparently became worse during the weekend. It looks like Athens cannot pay its loans and leave the euro zone.
Meanwhile, spot gold increased to $1,181.50 per ounce or 0.6 percent. It touched $1,186.91 in early trading which is the highest in almost one week.
Gold futures also jumped one percent to a session peak of $1,187.60 before gains were reduced. Meanwhile, silver climbed approximately one percent together with gold.
Risk-off outlook hit the market after news of this debacle broke out. It sent gold going up, according to precious metals traders from the MKS Group.
Bailout negotiations between the Greek government and foreign lending institutions collapsed and the European Central Bank stopped providing crucial funding support to Greek commercial banks. It left Athens with almost no option but to close system to prevent banks from disintegrating.
The looming default on international loans leaves Greece moving towards an exit from the euro. It also has massive repercussions for the international economic system.
Stock markets in Asia, US stock futures and the shared currency declined sending investors opting for safe-haven resources like gold and Japan’s currency.
On the other hand, data from the Commodity Futures Trading Commission showed speculators chose an upbeat bet in COMEX gold futures and transferred to a net-short position in silver.
SPDR Gold Trust, the biggest exchange-traded funds supported by the yellow metal, declared its holdings dropped 0.25 percent to 711.44 tons.
Some traders claim the crucial level for gold is $1,200. Gold can edge higher considering all these uncertainties. Nonetheless, outflows coming from the ETFS and muted physical demand can reduce any upside.