* Greece's anti-austerity party wins snap election
* Euro at 11-yr low, equities drop after Greek vote
* CME's Hong Kong contract begins trading
(Adds dollar move, updates prices)
By A. Ananthalakshmi
SINGAPORE, Jan 26 (Reuters) - Gold reversed earlier gains on
Monday as a stronger dollar offset safe-haven demand following
an electoral win by Greece's anti-austerity party that sparked
fears of renewed instability in Europe.
Greek leftist leader Alexis Tsipras, whose Syriza party
swept to victory in a snap election on Sunday, was set to become
prime minister of the first euro zone government openly opposed
to bailout conditions imposed by the European Union and
International Monetary Fund during the economic crisis.
European leaders have said Greece must respect the terms of
its 240 billion euro bailout deal, but Tsipras campaigned on a
promise to renegotiate the country's huge debt, raising the
possibility of a major conflict with euro zone partners.
The euro hit an 11-year low on Monday after the election
results, and U.S. stock futures also fell. The dollar index was
trading near its highest since 2003.
"People are very uncertain about the markets and are
wondering whether Greece will break out of the euro zone," said
Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong
Kong, adding this was lending some support to the yellow metal.
Spot gold eased 0.3 percent to $1,290 an ounce by
0754 GMT, after rising as much as 0.4 percent earlier in the
The yellow metal has had a good start to the year, gaining
about 9 percent so far this month, largely due to safe-haven
demand sparked by falling oil prices and European uncertainties.
The improvement in sentiment has been seen in investor
positioning. Speculators raised their bullish bets on gold
futures and options for the fourth straight week in the week
ending Jan. 20, while holdings in SPDR Gold Trust, the top
gold-backed exchange-traded fund, have also increased.
NEW GOLD CONTRACT
CME Group's Asian gold contract began trading in
Hong Kong on Monday, a new entrant in the regional race to
provide a price benchmark.
The 1 kg physically settled contract was trading at
a premium of $2-$3 an ounce over the global benchmark.
The launch of the CME contract within six months of new
contracts in Singapore and China underscores a desire in top
consuming region Asia to have price benchmarks that reflect
regional market dynamics, although liquidity has been a problem.
"There have been lots of recent contracts in Asia, vying for
liquidity. For CME, the delivery point is in Hong Kong, so that
should make it an interesting one," said a precious metals
trader in Hong Kong, which is the main conduit for gold into top
QWAK,Usury,There is no way they could or would dare to raise intrist rates :452::ahhhhh: it would cause the US dollar to instently implode and take all the other global currencies pegged to the dollar with it!:thumbs_down::devil1:
QWAK,gringott,Just think of your stack of GOLD and SILVER as a cousian so you won't get hurt when the elevator hits the bottom :36_1_25: ---- immagin that every ounce = a pound of feathers in grandmas feather bed!:2::thinkey:
You will be safe and warm and out of the storm!:wink_smile::applause_smiley:
But is it? Seems range bound and limited to me. Still in that $1200 +/- $30-40 range. When gold was up to $1220 were you guys talking about a slow steady incline?
Once gold gets below $1100 (even $1140) wake me up. When gold gets above $1300 wake me up. Until then, nothing is really happening. Just look at a chart over the last year and you can see the tight channel it has been traded in. Nothing new to see boys.