Gold prices reversed losses Wednesday, buoyed by fresh concerns over financial problems facing Greece.
Gold for June delivery, the most actively traded contract, closed up 0.7% at $1,201.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices were as low as $1,188.30 an ounce earlier in the session.
Greece’s negotiations with international creditors are nowhere near the point where bailout money can be disbursed, a senior European Union official said Wednesday. The Greek government has complained that it will soon run out of cash if no bailout money is disbursed, a development that would raise the prospect of a default on its debt and even an exit from the euro.
The renewed worries regarding Greece’s finances are good news for gold. Some investors buy the precious metal in times of political or economic uncertainty, believing that gold will perform better than other assets in turbulent times.
“Looking at the global financial picture, this is not the time to cancel your insurance and may be a good time to buy some protection, if you do not have some gold as a diversifier,” Peter Hug, global trading director at Kitco Metals, said in a note to investors.