Spot gold rose to its highest in a week and half on Tuesday as the dollar weakened after euro zone policymakers sealed a deal for a second bailout for Greece. Gold has drifted between $1,700 and $1,750 in the past two weeks, following the ups and downs in Greece's struggle to obtain a much needed rescue package.
"Gold may remain in a consolidation phase in the near term, as it is lacking a catalyst," said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. Spot gold inched up 0.4 percent to $1,740.35 an ounce by 0624 GMT, after touching a one-week high of $1,740.49. US gold rose 1 percent from Friday's close to $1,743.5 following the Greek bailout, catching up with gains in cash prices after the US market shut on Monday for a public holiday.
Technical analysis suggested that spot gold faces resistance at $1,735 an ounce, and a break above this level could send prices towards $1,747, Reuters market analyst Wang Tao said. "The physical market is very quiet and there seems to be less interest from funds," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. Spot platinum rose 0.8 percent to $1,653.50 an ounce, up nearly 19 percent so far this year, benefiting partly from supply concerns in top producer South Africa. Impala Platinum, the world's second-largest platinum producer, has agreed to re-instate all 17,200 workers who were dismissed following an illegal strike, aiming to end a dispute that paralysed the company's biggest mine, the miners' union said.
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