Gold rose on Monday, buoyed by chart-based buying and the weak US dollar ahead of a Federal Reserve policy meeting while persistent uncertainty over Greece after debt talks with its creditors stalled underpinned prices. Spot gold was up 0.5 percent at $1,186.60 an ounce by 3:21 pm EDT (1921 GMT), while US gold futures for August delivery settled up $6.60 an ounce at $1,185.80.
The spot market turned positive after attracting technical buying around $1,180, a long-term support level. "We had quite the substantial build in speculative short interest last week. That probably squeezed some of those weak hands out on the technical move," said Mike Dragosits, senior commodity strategist at TD Securities in Toronto. Also supportive were the hardened stances of Greece and its creditors. This comes after the collapse of talks aimed at preventing a default and possible euro exit, prompting Germany's EU commissioner to say the time had come to prepare for a "state of emergency".
"Greece is certainly keeping a floor under precious metals," Dragosits said. Silver was up 1.2 percent at $16.11 an ounce, while platinum fell to a six-year low of $1,072.50 an ounce and palladium lost 0.5 percent to $733 an ounce.