SINGAPORE: Gold hovered unchanged at around $1,730 an ounce on Friday in cautious trade as euro zone finance ministers held off on approving a bailout package for Greece even after it said it had clinched a deal on economic reforms.
Even a cut in the metal's trading margins by the biggest operator of US futures exchanges, the CME Group, failed to spark the enthusiasm of sidelined investors, and kept spot gold prices little changed at $1,732.34 an ounce by 0315 GMT, after two straight days of losses.
US gold edged down 0.3 percent to $1,735.40.
"Many are still standing on the side waiting for something new to happen in the market," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
"COMEX cut margins probably because the market volatility was low and people didn't have much interest," he added.
Gold prices have been heavily influenced by the grinding process of getting Greece to agree to reforms and austerity measures in exchange for a bailout from its international lenders.
Market participants expect gold to be trapped in a range of between $1,710 and $1,760 in the absence of a fundamental shift in sentiment.
The CME Group on Thursday lowered trading margins for a range of commodities contracts, including gold, silver and platinum, effective after the close of business on Monday. This is the first margin cut for COMEX gold since June 2011.
Technical analysis suggested spot gold could fall to $1,698 during the day, said Reuters market analyst Wang Tao.
SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, reported that its holdings increased to 1,278.344 tonnes by Feb. 9, the highest level since late December, showing investment demand in bullion remained steady as the murky economic outlook supported safe-haven interest.
The total amount of gold held by gold ETFs was little changed from a week earlier, after four weeks of gains.
Spot platinum edged down 0.1 percent to $1,649.74, headed for a 2-percent weekly rise. An 18-percent year-to-date rise helped platinum narrow its discount to gold to near $70 earlier this week, its lowest in more than four months.
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