Gold is lower in morning trade Friday as expectations grow that Greece's bailout package could stabilize the euro, and lessen investors' appetite for alternative assets. Greek Prime Minister George Papandreou called for financial aid from both the European Union and the International Monetary Fund, which has pushed the euro back up from its 12-month low from Thursday and lessened interest to those seeking alternative assets to the European currency.
Still, investors remain on their toes amid lingering worries about debt defaults in the euro zone in particular. Greece's budget deficit is 13.6% of GDP, according to the European Union's statistics office. For Europe as a whole, the deficit accounts for 6.3% of GDP. Such concerns are seen keeping the allure of alternative assets to the euro, including precious metals in the longer term.
At 0750 ET, gold is down 0.2% at $1,141.00 an ounce, while silver is 0.5% lower at $17.92 an ounce, and copper is largely flat at $348.70 a pound.
The Papua New Guinea-based Lihir Gold Ltd. ( LGL ) reported gold production falling 26% in the first quarter, down to 229,757 ounces. The second-largest gold producer on the Australian stock exchange, Lihir has raised its production target for the full year to reach between 1 million and 1.1 million ounces, up from its previous estimate of 960,000 to 1.06 million ounces. The company is seen considering takeover offers, having rejected a deal about $8.6 billion from Newcrest Mining Ltd. ( NCM ) earlier this year.
In Russia, aluminum group UC RUSAL (0486) rejected a claim by Guinea's mines minister that the company owes at least $860 million in unpaid taxes. Mines Minister Mahmoud Thiam said that the $860 million figure comes from independent auditors Alex Stewart International, which the country hired to look into RUSAL's operations in Guinea. In a statement, RUSAL said that it has not received official notification from the Guinean government, and declared that it was one of the biggest taxpayers and employers in the African nation.