Gold edged up on Monday as bargain hunters lifted prices from four-month lows, but gains were capped as an inconclusive Greek election raised the risk the country could exit the eurozone and fanned fears of a worsening debt crisis in the region. Gold has moved in tandem with riskier assets this year as the turmoil in Europe sent the euro to multi-month lows and investors turned to the safety of the dollar, analysts said.
Gold hit an intraday high at $1,585.39 an ounce and was barely changed at $1,578.45 by 0615 GMT. Bullion had tumbled to a low of around $1,573 on Friday, its weakest since early January, on fears that the debt crisis in Europe will hurt global economic growth. "I think for as long as the crisis in Europe drags on, it's going to keep sentiment broadly in check. At the moment, gold has been painted with the risk brush. It's going to be very much a tracker of the equity markets," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore. "The range should be from just below $1,580, up towards $1,600. The market really needs to get back towards $1,600 or above in order the confirm we have bottomed." US gold for June slipped $5.50 an ounce to $1,578.50.
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