Gold on the Rise as Greece Concerns Rattle European Markets

Gold rose on Monday, retaking its gains after a dramatic slide on Friday, February 6.

Gold prices rose on Monday, February 9 recovering from an almost three-week slide, triggered by both shrinking European share indexes and growing concerns regarding the Greek economy.

Spot gold rose by 0.4 percent reaching $1,238.46 per ounce after it slid to $1,228.25 on Friday, February 6, hit by a strong US dollar after solid US jobs data was reported. Experts point out that gold's volatility could have been caused by numerous issues, including US interest rate hike talks as well as concerns over the future of Greece and its austerity policies. It is believed that gold prices will fluctuate for the next few weeks.

European equities could come under tremendous pressure both on Wall Street and in Asia, media reports say, citing China's poor trade data and rising worries over its economic growth rate. At the same time, the US dollar also lost some of its gains won on February 6.

The rise in gold bullion was bolstered by increased physical gold purchases in China on the eve of its Lunar New Year holiday, February 19-20, experts note. Chinese gold buyers traditionally boost the gold market ahead of the holiday. So far, Chinese premiums mounted to $4-$5 an ounce on Monday with the highest volumes traded on the Shanghai Gold Exchange this week.

Meanwhile, spot silver rose by 1.3 percent to $16.89 an ounce, and palladium remains at $779.50 an ounce. Platinum dropped 0.9 percent to $1,209 an ounce.