Price of gold has increased for two days in a row as optimism increased on a resolution to the debt problems of Greece. Even though the price of gold goes down when share prices increased but the weakening of the dollar against the euro allowed gold prices to increase.
Following the start of voting, the euro increased against the dollar as a Greek opposition member indicated that she would vote in favor of the austerity plan which boosted the price of gold.
Spot gold prices increased by 0.5 percent as it reached $1,508.51 per ounce after peaking at $1,509.96 during the day. The price of gold at the COMEX has also increased by 0.6 percent at $1,509.20 per ounce.
An analyst indicated that even though gold prices increased recently, the reaction to the result of the vote by the price of gold should not be a too strong.
The recent activity at the market was weak due to the low demand during this season and the absence of factors that would have a bigger effect on the price of gold. An analyst from Barclays Capital indicated that even as reasons in acquiring gold are present, they are still not strong enough.
Gold prices have not gone low enough to motivate a noteworthy acquisition from the emerging market as well as safe haven buyers. Recent information has indicated that worldwide ETF bullion holdings have increased as investors were acquiring gold.
Observers have indicated that gold prices may increase despite the recent uncertainty in the market. This comes as interest rates remain low in the US and the fiscal situation in Europe remains doubtful, which may affect the price of gold.
While gold prices remained above the $1,500 mark, platinum and palladium prices also increased. The increase in palladium prices comes amid apprehension on the South African power supply, which is the top platinum producer in the world. This situation may affect the price of gold.