Gold traded near a five-month high as anti-austerity party Syriza’s victory in Greek elections raised prospects that the country will seek to renegotiate the terms of an international bailout.
Bullion for immediate delivery rose and fell at least 0.3 percent, and traded 0.1 percent lower at $1,293.04 an ounce at 3:09 p.m. in Singapore, according to Bloomberg generic pricing. The metal climbed to $1,307.62 on Jan. 22, the highest level since Aug. 15, as the European Central Bank expanded stimulus.
Syriza won a more decisive victory than polls predicted, coming within two seats of an absolute majority with most votes counted. Leader Alexis Tsipras had pledged to secure a debt writedown and end austerity measures, policies that outgoing Prime Minister Antonis Samaras warned could trigger an “accidental” exit from the euro. Gold rose 9.2 percent this year, also helped by speculation the Federal Reserve may hold back from raising interest rates.
“The outcome of the Greek elections raises fears of an exit from the euro zone, increasing uncertainties in the market and therefore demand for gold in the short-term,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks.
Gold’s 14-day relative-strength index held around the level of 70 which signals to some investors that prices may reverse. Holdings in exchange-traded products backed by bullion expanded for a sixth day on Jan. 23 to cap a second week of gains, according to data compiled by Bloomberg.
Bullion for February delivery was little changed at $1,292.80 an ounce on the Comex in New York. The net-long position in gold climbed 27 percent to 145,732 futures and options contracts in the week ended Jan. 20, according to U.S. Commodity Futures Trading Commission data.
Silver for immediate delivery declined 0.4 percent to $18.2345 an ounce. Platinum fell 0.6 percent to $1,261.07 an ounce while palladium retreated 1.9 percent to $760.82 an ounce.
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