Gold prices reversed directions Thursday and eked out a gain on a Reuters report that a Greek bond swap deal could be completed over the weekend.
Gold for April delivery closed up 30 cents at $1,728.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,731.10 and as low as $1,706.70 an ounce, while the spot price was up $1, according to Kitco's gold index.
Silver prices lost 3 cents at $33.37 an ounce while the U.S. dollar index was shedding 0.49% at $79.32.
The euro gained traction against the dollar, which was helping support gold on a report that a Greek bond swap deal could be launched over the weekend. Some of Greece pairing down its debt comes in the form of a bond swap where holders trade in current bonds for new longer dated ones at a lower interest rate.
Gold had been getting hammered as the threat of Moody's downgrading 17 global and 114 European financial institutions propped up the dollar as the safe haven of choice. Gold's reversal then also triggered any short covering -- where traders buy back previously sold positions. "No one really wants to be short in front of differing headlines minute to minute from Greece," says George Gero, senior vice president at RBC Capital Markets.
"Right now it's that juxtaposition between European sovereign situation, particularly around Greece," says Will Rhind, head of U.S. operations for ETF Securities, "and that has an effect on the currencies which effects gold." Read More
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