Gold prices rose Monday after Greek lawmakers accepted terms of a deeply unpopular austerity plan that Eurozone leaders demanded as the price for financially rescuing the debt-choked nation.
The lawmakers' vote appears to be the last obstacle to the International Monetary Fund, the European Union and the European Central Bank giving Greece $172 billion. The nation has only weeks before a $19 billion bond redemption and -- barring a financial rescue by the so-called troika -- is expected to default.
Among the measures included in the latest austerity plan is a 22 percent cut in the minimum wage and layoffs for 15,000 government employees.
At least 80,000 protesters demonstrated in Athens against the bill, with another 20,000 in Thessaloniki.
With the Eurozone apparently not facing the prospect of a member declaring bankruptcy and possibly leaving, investors moved out of safe havens like the U.S. dollar and Treasuries and into stocks.
The euro soared to an eight-week high of more than $1.33. The dollar fell against a basket of major currencies.
In Asia, major stock indexes were all higher. In Europe, equities rose too: The FTSE 100 gained 0.82 percent, the DAX rose 0.56 percent and the CAC 40 climbed 0.64 percent.
In the U.S., futures on the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 indicated a higher beginning to the week's trading.
Industrial commodities rose, with both crude oil and copper higher in London trading.
Assuming the European Union approves the austerity on Wednesday, gold could break out of a range in which it has been confined for weeks.
Gold has repeatedly tested the $1750 mark with little success and the $1710 support has been similarly resilient, Edel Tully, an analyst with UBS said in a note. The market clearly lacks the conviction to break out of this range at this stage, though this is understandable considering the lack of finality in Europe. The true test of appetite would come once this particular Eurozone event risk is out of the way.
Despite the initial positive response traders remained cautious.
We are still looking for more measures out of Europe before we see a sustainable risk rally. Yes, perhaps it's good that we have a second bailout package and we are sure that at least we are not going to see Greece defaulting, Ong Yi Ling, an analyst at Phillip Futures, told Reuters. I am looking for the resistance for gold at about $1,760. That will be the first resistance and the second one is at about the $1,800 level. For gold to break the $1,800 level, we need more measures, I would say.
Gold for April delivery added $6.20 to $1,731.50, while spot gold rose $2.12 to $1.729.95.
Silver for March delivery increased 18 cents to $33.79, while spot silver was up five cents to $33.82.