Gold held near its highest in almost four weeks in volatile trade on Tuesday as lingering fears about a Greek debt default overshadowed a rebound in the euro, while silver was heading for its biggest monthly decline since 2008. A Wall Street Journal report that Germany could make concessions on efforts to put together a bailout for Greece lifted the single currency, but analysts said Grece's debt crisis deterred investors from searching out higher risk assets.
Spot gold hit an intraday high of $1,540.36, its highest since May 4, before slipping to $1,536.59 an ounce by 0536 GMT, down 0.09 percent. Gold is down 1.7 percent so far in May, hovering below a lifetime high around $1,575 touched early in the month. "It's crucial for markets to see whether Greece is actually sustainable and whether it can actually obtain the next 12 billion euros that is required for them to meet their funding needs in July," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
Silver was barely changed at $38.12 an ounce, but the metal is down around 20 percent in May - its biggest monthly decline since 2008. Silver struck record at $49.51 an ounce in April. The physical market lacked activity, but some speculators could be tempted to cash in on gold's gains. Demand from top consumer India was likely to ease as the wedding season comes to an end. The Shanghai bourse plans to temporarily increase margins on gold and silver forward contracts on settlement at June 2 and trading limits on June 3, before the market closes for a public holiday on June 6.