Gold regains stability after panic caused by Greek crisis

Morning gold prices have settled around $1166.56 after the release if data from the U.S. and the reigning fear of the deepening crisis in Europe.

The Fed decided to keep benchmark rates at their current 0.0%-0.25% levels, while the reserve announced that the U.S. economy is showing signs of recovery and gradual improvement in the labor market.

Pessimism is spreading through the markets as investors fear that EU governments will not be able to pay off their debts as the Greek crisis deepens. New countries are being added to the black list, as in the case of Portugal, whose credit rating dropped two steps while the dread of a Greek scenario is ever so real. Spain is also trailing on the same path as its credit rating was also lower by Standard & Poors to AA from AA+, which in turn pushed investors into the golden safe haven.

Greece has yet to receive the 45 billion euro aid package, while some of the biggest donors like Germany delayed the approval which ignited further pessimism in the market before the shock of the junk downgrade. The aid was supposed to be provided by the euro zone countries, which would be responsible of providing two thirds, and the International Monetary Fund (IMF) shouldering the rest.

Markets are very unstable, though this is rare during this time of year. The Greek crisis eclipsed all the positive income reports from major companies, as they recorded higher than expected income in the first quarter.

Investors usually head for gold as a safe haven during time like these, mainly due to the fact that declining confidence in markets makes low-risk and return assets more appealing. Gold is the most common investment during economic downfalls and an example would be the surge of gold investment in 2008 when Lehmann Brothers announced bankruptcy.

The dollar index retreated 0.3% to 82.15 after rising yesterday by 0.7% to the highest level since May 2009 of 82.70.

Current gold prices climbed up by 0.2% to $1168.53, while silver gained 0.1% and reached $18.104. Platinum gained 0.4% and recorded $1713.70, while palladium ascended 0.5% to $543.

S&P GSCI closed at 538.94 in evening trading after adding 2.02 points, while RJ/CRB gained 1.33 points and closed at 274.35.

Gold futures due June fell by 0.38% at 2:35 EST to $1167.300, while silver futures retreated 0.025% to $18.110. As for copper futures, they climbed up by 0..400% to $339.050.