LONDON: Gold prices were little changed on Friday as caution ahead of Greece's elections this weekend, which could determine its continued membership in the euro zone currency bloc, kept buyers on the sidelines.
No Greek party has called for euro exit, but the leftist SYRIZA party, which is running neck-and-neck with the conservative New Democracy party, rejects the terms of a bailout struck in February, without which Greece will default.
Spot gold was steady at $1,622.80 an ounce at 1204 GMT against $1,622.30 late on Thursday.
"Not many will dare take on fresh longs ahead of the weekend given gold's peculiar behaviour recently, when it swings back and forth with or against risk sentiment," VTB Capital analyst Andrey Kryuchenkov said.
"We should stall near this week's highs below $1,630, with all attention on Greece, and then the G20 summit next week."
Prices are set to rise nearly 2 percent this week, however, after soft US data and speculation that the euro zone crisis could hamper US growth fuelled talk of more quantitative easing from the Federal Reserve.
That would likely undermine the dollar and lead to fresh volatility in the currency markets, potentially boosting interest in gold as an alternative asset. It tends to benefit from weakness in the US currency, in which it is priced.
Risk aversion in the wider financial markets eased a touch as central banks indicated they stood ready to take steps, including coordinated action, to deal with the risk of a Greek exit from the euro zone. European shares rose, while Spanish and Italian bond yields fell.
"The next big event in the gold world is likely to be the Greek election," HSBC said in a note. "Gold may be caught between the election and US monetary expectations."
US gold futures for August delivery were up $3.90 an ounce at $1,623.50.
RESISTANCE AT $1,641/OZ
From a chart perspective, analysts who study past price patterns for clues as to the future direction of trade identify resistance for gold at $1,641 an ounce. "Above there opens our $1,700 target," Barclays Capital said in a note.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust in New York, said its holdings rose just over 3 tonnes on Thursday, their biggest one-day increase since June 1.
Among other precious metals, silver was up 0.2 percent at $28.66 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, rose back towards its 2012 high as gold outperformed.
Investors' confidence in silver was battered by two sharp corrections last year, which saw the metal lose a third of its value in the six sessions after it hit record highs in April, and fall 36 percent in three days in September.
Spot platinum was little changed at $1,486.75 an ounce, while spot palladium was down 0.1 percent at $629.47 an ounce.
Platinum's ratio to gold ticked back up on Friday as gold prices outperformed, having dropped back from five-month highs earlier in June. Platinum prices have received little support from threats to South African mine supply, which is being hampered by low metal prices.
"Platinum prices need to rise to around $1,650 an ounce in order for South African platinum producers to be profitable," Natixis said in a weekly report.
"Lower prices will lead to a protracted period of cutbacks and restricted development which will bring the market back into equilibrium via a slowdown in future supply."
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