Gold was under pressure in Asian trading Monday, but pared some early losses, with the market now expecting the metal to take cues from a Federal Reserve meeting this week. Some traders attributed the initial dip in prices to profit-taking after news that a pro-bailout party in Greece will be forming the government, dispelled fears of an immediate Greek exit from the euro zone. Spot gold was at $1,622.50 a troy ounce, down $4.20 from its previous close. Earlier in the session it fell to $1,607.15/oz, but quickly rebounded. “Prices could dip back towards $1,600/oz, but while the immediate cause for concern has abated, the broader crisis in the region persists, which should underpin investor appetite for hard assets,” ANZ analysts said in a note. “Elections in Greece happened on Sunday…we haven’t seen Europe and the U.S. trade as yet,” a trade official based in Perth said. He expects gold to take direction from the Federal Open Market Committee’s meeting June 19-20. Any announcement about monetary easing following a string of weak economic indicators in the U.S. could push gold higher, he said. When an earlier round of quantitative easing was announced in November 2010, it pushed gold to a record high as more money was pumped into the financial system. Some market participants said there will be disappointment if the Fed doesn’t announce any easing, but Stan Shamu of IG Markets said the Fed will likely make some comments on the post-election economic scenario in Greece. Gold’s price direction will now depend on “how dovish the comments are,” Shamu said. He noted that $1,600/oz remains a key psychological support. Silver mostly traded in a range after touching an intraday high of $29.02/oz. Spot silver was at $28.63/oz, down 11 cents from its previous close. Spot platinum was the strongest performer in the complex, followed by palladium. Standard Bank analyst Leon Westgate said platinum prices may move higher, “perhaps touching $1,550/oz in the next few days.” Spot platinum rose 1.6% to $1,503/oz Monday, the highest in the session so far. “This would not be on the back of strong real demand, but rather on the back of short-covering,” Westgate said. Platinum may find additional support should gold manage to breach its resistance level of $1,630/oz, he added. Spot platinum was at $1,490.75/oz, up $10.75, while palladium was at $630.75/oz, up $5.75.—Great Southern Coins
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