Gold prices held steady after falling from US$1,550/oz on profit taking. Demand for the safe haven gold was boosted by weak US data. An employment report from Automatic Data Processing (ADP) showed that the private sector added just 38,000 jobs in May, while the Chicago PMI index fell to the lowest level since November 2009 last month.
Moody’s decision to slash Greece’s sovereign rating by three notches to Caa1, indicating there was a 50 percent chance that the country will eventually default on its debt.
However, it was reported later that Greece agreed to a series of measures to save a further €6.4 billion and will unveil a new austerity package on Friday.
The euro rose against the US dollar on the news, providing a little support for gold, which has an inverse relationship with the greenback.
Traders are holding on to their positions in gold ahead of tomorrow's key non-farm payrolls report from the US Department of Labor.
Gold last traded at US$1,538/oz. Platinum dropped to US$1,816/oz, while silver rose to US$36.86/oz.
Fresnillo (LON:FRES) fell 2.2 percent, while most other mining stocks were broadly flat. FTSE 250 constituent Hochschild Mining (LON:HOC) advanced 2.5 percent.
Microcap Oxus Gold (LON:OXS), the only publicly listed gold mining company with primary operations inside the Republic of Uzbekistan, soared 29 percent.