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PrintGold prices were steady on Thursday after posting a fourth straight session of gains the previous day, when weak U.S. data fuelled expectations for monetary stimulus, with investors nervous before a make-or-break Greek election.Cash gold has gained more than 1 percent this week, breaking ranks with the euro, which has fallen 0.8 percent as mounting worries about the euro zone's ability to contain its debt crisis drew some safe-haven flows into gold.
Moody's cut Spain's sovereign debt rating by three notches,and economists expected Madrid to seek an international bailout soon, despite a newly approved euro zone plan to help the country's battered banks.
Weak retail and inflation data added to evidence of a slowdown in the U.S. recovery, raising expectations for further easing by the Federal Reserve."Once there's evidence that the policymakers on the monetary side are going to have to release stimulus, especially with inflation coming up, we should see rising interest in gold and silver," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
Spot gold was little changed at $1,618.10 an ounce by 0656 GMT, after rising nearly 2 percent over the past four sessions, its longest winning streak since late April.The U.S. gold futures contract for August delivery
was nearly flat at $1,619.German Bund futures, a barometer of sentiment in the European government debt market, opened slightly higher, reflecting worries over Spain's downgrade, as investors watch anItalian bond auction later in the day.
But traders said the Greek election on Sunday, which may decide whether the country remains in the euro zone, is key.The correlation between gold and the dollar stood at -0.249, close to an eight-month high of -0.236 hit last week. A reading of -1 suggests a perfectly inverse correlation.Gold bar premiums in Singapore and Hong Kong edged lower from last week, as demand remained sluggish, dealers said.
"June is a quiet month for jewellers' demand, while investors are only buying on dips," said Dick Poon, manager of precious metals at Heraeus in Hong Kong, adding that investors saw $1,550 as a good bargain-hunting level. In Hong Kong, premiums stood in a range of $1 to $1.40 an ounce, down from $1.10 to $1.60 last week, dealers said.
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