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Gold steadies as euro gains versus dollar on Greece

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Reuters LONDON
Last Updated : Jul 10 2015 | 8:42 PM IST

By Clara Denina

LONDON (Reuters) - Gold steadied above a four-month low on Friday, as the dollar tumbled against the euro on signs of progress in Greece's efforts to secure fresh funding. Spot gold was unchanged at $1,159.65 an ounce by 1436 GMT. Prices touched $1,146.75 on Wednesday, their lowest level since March 18, when the dollar was boosted by weakness in the euro on Greece and the tumble in Chinese stock markets.

U.S. gold for August delivery was also unchanged, at $1,159.00 an ounce.

The euro climbed 1.2 percent against the dollar, making dollar-denominated assets such as gold cheaper for buyers using other currencies.

"Gold is getting some support from the stronger euro but if we get a deal with Greece on Sunday, it should be bearish for gold because it removes any risk," Societe Generale analyst Robin Bhar said.

"The major driver is the U.S. because we have Yellen speaking today and markets will be watching that for any clues about the rate hike."

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Federal Reserve Chair Janet Yellen is due to speak on Friday on the U.S. economic outlook, at 1630 GMT.

Physical demand remained tepid this week as prospective investors in China chased bargains in equities after a market rout, while those in India delayed purchases.

"We are seeing the chance of a break below $1,150 an ounce in coming sessions. That could perhaps help generate some physical demand in Asia," MKS SA head of trading Afshin Nabavi said.

The metal in India was still sold at a discount to the global benchmark.

Chinese stocks rose sharply for a second day on Friday after Beijing moved to stem a rout that pulled down key indexes by around 30 percent from mid-June, banning shareholders with large stakes in listed firms from selling.

Also aiding gold, the International Monetary Fund trimmed its forecast for global economic growth this year to 3.3 percent from a previous estimate of 3.5 percent, citing recent weakness in the United States.

Silver was up 0.4 percent at $15.43 an ounce, palladium rose 1.3 percent to $645.47 an ounce and platinum gained 0.2 percent to $1,023.24 an ounce, slightly rebounding from a 6-1/2 year low near $1,000 hit on Wednesday.

(Additional reporting by Manolo Serapio Jr in Manila; Editing by William Hardy and Pravin Char)

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First Published: Jul 10 2015 | 8:21 PM IST

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