Gold steadied on Wednesday after falling more than 1 per cent in the previous session as Greece’s plan to end a standoff with creditors lifted the appetite for risky assets such as equities.
Spot gold was up 0.2 per cent at $1,262.04 an ounce by 0403 GMT, after falling 1.2 per cent on Tuesday, which marked gold’s fourth drop in five sessions.
“Appetite for risk now appears higher and that is spurring some rotation of funds away from the safe havens in the yen and gold to riskier assets such as equities and the euro,’’ Phillip Futures investment analyst Howie Lee said in a note.
“Barring any downside black swan events, it is now increasingly unlikely that we could see gold racing for $1,300 again in the near future.’’
Spot gold has steadily fallen since hitting a five-month peak of $1,306.20 on January 22, paring the metal’s year-to-date gain to less than 7 per cent.
US gold for April delivery was also nearly flat at $1,261.50 an ounce.
Debt deal
Greece’s new government dropped calls for a write-off of its foreign debt and proposed ending a standoff with its official creditors by swapping the debt for growth-linked bonds.
That helped calm fears over the euro zone, lifting Asian stocks which tracked Wall Street’s gains overnight. A sharp 19 per cent rebound in oil prices in the four sessions to Tuesday also burnished the risk appetite even as crude pared some of those gains on Wednesday.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 24.59 million ounce on Tuesday from 24.65 million ounce the day before, which was the highest level since October.