US MIDDAY: gold rises

Gold settled a notch higher on Monday as investors held to it as a safe bet against growing concerns over eurozone finances, while a relatively strong dollar capped gains in the precious metal. The euro slid against the dollar after the region's finance ministers gave Greece two weeks to approve further spending cuts and tax rises in exchange for another 12 billion euros in emergency loans.
The spot price of bullion was at $1,540.80 per ounce by 3:15 pm EDT (1915 GMT), compared with $1,538.40 in New York late on Friday. Gold priced in sterling hit a record high at 954.63 pounds in Monday's trade. US gold futures' benchmark August contract finished the official session up $2.90, or 0.2 percent, at $1,542 per ounce.
"The ultimatum from the European Union to Greece, and concerns there might be a Greek default after all these, is keeping the safe-haven bid going for gold," said Bruce Dunn, vice president at New Jersey-based precious metals dealer Auramet Trading. "But the dollar has been holding up pretty well too, and that's stopping gold from really making a big run for now."
Robin Bhar, precious metals analyst with Credit Agricole in London, said gold was likely to be stuck in its present range until the Greek bailout was resolved. "You're not going to get too much movement either way until we get more clarification as to what happens on Greece. The market is hungry for an actual agreement to be signed, sealed and dusted."
On the US front, outlook for both gold and the dollar was fraught with uncertainty as investors await the US Federal Reserve's meeting and decision this week on interest rates. Financial markets are bracing for the conclusion at the end of June of the Fed's "QE2" program, a cheap-money policy credited with boosting stocks but blamed for sky-high commodities prices and a weak dollar.
Jewellers in Indonesia have started making inquiries for gold ahead of the fasting month of Ramazan in August, and those in Hong Kong look happy to buy on dips. But volatile bullion prices have also scared off investors in Japan, dealers said. Silver reversed losses and was at $35.97 an ounce from $35.80, below a record at $49.51 an ounce in April. Platinum hit its lowest since end-March at $1,720.50 an ounce. It later was at $1,728.49 from Friday's $1,750.65 an ounce.