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Gold futures inch up ahead of Greek confidence vote

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Forex Pros - Gold futures edged higher on Tuesday, hovering close to a two-week high as weakness in the U.S. dollar supported prices ahead of a crucial confidence vote on the Greek government later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,544.05 a troy ounce during late Asian trade, edging 0.15% higher.

It earlier rose to a daily high of USD1,544.95 a troy ounce, just below a two-week high of USD1,546.95.

The euro rose against the U.S. dollar, hitting a four-day high after Klaus Regling, head of the European Financial Stability Facility said Monday that the effective lending capacity of the bailout fund would be raised to EUR 780 billion from EUR440 billion.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.36% to trade at 75.20.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Greek Prime Minister George Papandreou is to face a vote of confidence in his newly appointed government later in the day, ahead of a vote next week on an unpopular austerity plan.

Meanwhile, ratings agency Fitch said earlier that it would consider a voluntary rollover of Greek sovereign debt as a default.

The ratings agency reiterated its warning on U.S. sovereign debt, saying that it would place the country's rating on watch negative if the U.S. government fails to lift its debt ceiling by August 2.

Gold is often seen as an alternative currency in times of global economic and political uncertainty.

Elsewhere, silver for July delivery rose 0.35% to trade at USD36.15 a troy ounce during late Asian trade, while copper for July delivery added 0.56% to trade at USD4.097 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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