US gold rebounds as debt concerns remain

NEW YORK: Gold futures turned higher in early Friday, supported by worries about the US debt ceiling negotiations.

Copper was also stronger on worries about Chilean supplies and demand in top consumer China.

Gold firmed, erasing earlier losses, as reservations over this week's bailout plan for debt-laden Greece and concerns over negotiations on raising the US debt ceiling supported interest in the metal as a safe store of value.

Copper firmed, supported by a weaker dollar against the euro, stronger investment demand, worries about supplies from Chile and receding worries about demand from top consumer China.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 2.4 percent from last Friday.

Physical buyers stood on the sidelines while scrap selling dwindled after prices eased from record high levels, as market participants wait for cues on further price moves from the unfolding euro zone debt crisis and US debt talks.

Euro zone leaders agreed on a second rescue package for debt-stricken Greece that risks triggering a temporary default and will give their financial rescue fund broader powers to try to prevent market instability spreading through the region.

MARKETS

Crude oil rose as Europe's latest attempts to resolve the debt crisis and signs of progress on a US debt reduction deal offset weak economic data from China, the world's second biggest oil consumer. World stocks and the euro rose on the debt package for Greece.

Copyright Reuters, 2011