Gold Holds Steady—Eyes Euro/Dollar, Greece

Reuters, Frank Tang

Gold stayed nearly unchanged on Monday, stemming the previous two sessions' sharp losses as a higher euro against the dollar ahead of a key vote by the Greek parliament on austerity measures boosted investor risk appetite.

Gold's response to Greece's debt crisis has so far been erratic. Last week, the metal ended down 2.5%, its worst in eight weeks as fears of economic slowdown pressured bullion prices. In the past, gold tended to benefit as a safe haven in times of economic uncertainty.

Spot gold was down 0.1% at $1,497.71 an ounce at 11:45 a.m. EDT. U.S. gold futures for August delivery fell $2.50 an ounce to $1,498.40.

Silver was down 1.5% at $33.75 an ounce, reflecting losses in other industrial metals.

Gold fell as low as $1,490.90 an ounce in early trade as oil and industrial metals extended last week's hefty drop. Despite the recent retreat in prices, gold was still one of the best performing commodities in the second quarter, rising 4% while most other goods dropped in price.

However, bullion investors on Monday sided with stronger U.S. equity markets, which rebounded nearly 1% as investors bet there would be a near-term resolution to some of the uncertainty over Greece's fiscal crisis.