Gold futures gained the most in four weeks after a new budget proposal from Greece snarled efforts to break a standoff with its creditors, boosting the metal’s appeal as a haven.
Talks this week have failed to make progress after Greece submitted a budget-deficit plan that creditors considered unfit, according to two official involved in the process. Greek Prime Minister Alexis Tsipras plans to meet the leaders of the euro area’s two biggest economies in Brussels on Wednesday.
Gold posted a third straight gain, the longest rally since May 18, as the standoff fueled concern that Greece will exit the euro area. The tensions have helped revive bullion, which had fallen for three weeks amid speculation that the Federal Reserve will raise interest rates this year.
“We still don’t think they’ll let the Greeks exit the euro zone, but if you asked what are the chances of it happening today versus three weeks ago, you’d have to say the chances are higher today,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “There is some interest to buy gold against the euro to hedge against a Greek accident.”
Gold futures for August delivery gained 0.8 percent to $1,186.60 an ounce at 1:49 p.m. on the Comex in New York, the biggest gain since May 13.
On Friday, gold touched an 11-week low after a report showed the U.S. added more jobs in May than forecast by analysts, boosting the case for the Fed to raise borrowing costs. Higher rates drive investors to favor assets that pay interest, curbing the allure of bullion.
Silver futures for July delivery climbed less than 0.1 percent to $15.959 an ounce, snapping five straight losses. Holdings in exchange-traded products backed by the metal rose for the sixth session on Tuesday to 19,336.9 tons, the longest stretch since 2013, data compiled by Bloomberg showed.
Platinum futures for July delivery increased 0.6 percent to $1,115.20 an ounce on the New York Mercantile Exchange. Palladium for September delivery added 0.5 percent to $743.50 an ounce, snapping an eight-day losing streak, the longest slump since Feb. 4, 2014.