Gold returns to $1,170 as Greeks protest new austerity measures, markets keep falling

Gold prices are aiming for a return to the new 2010 high of US$1,192/oz that was set yesterday before the yellow metal slipped below US$1,170/oz after failing to find enough support to test US$1,200/oz plateau it reached in late 2009.
Gold is increasingly seen as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis. In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF). Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
The EU’s stats agency Eurostat has recently revised Greece’s 2009 deficit to 13.6% of the GDP from the previous estimate of 12.9%. The county is aiming to bring the deficit within the EU’s cap of 3% by 2014.
Greece’s fiscal crisis has been weighing on the euro for months to weaken it against the US dollar and limit gains in gold, which is seen as an alternative investment to the greenback and usually moves inversely to the American currency. However, gold has lately defied this trend, coming close to topping all time highs on safe-haven buying. The FTSE 100 shed a further 1% today after declining 2.6% on Tuesday, while the Dow Jones Industrial Average is also projected to extend yesterday's 2% loss.
Gold has returned to US$1,170/oz, while silver and platinum declined to US$17.51/oz and US$1,649/oz respectively.
All major mining stocks declined with the sole exception of silver miner Fresnillo (LSE: FRES), which advanced 1.6%. Randgold Resources (LSE: RRS) shed less than 1%, while platinum miner Lonmin (LSE: LMI) declined 3.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved down 3.7%.
Silver producer Hochschild Mining (LSE: HOC) lost 5.3%, while fellow midcaps gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) pulled back 4.7% and 3.9% respectively.
Africa operating gold and platinum miner Goldplat (AIM: GDP), Russia operating Ovoca Gold (AIM: OVG) and Africa focused gold miner Pan African Resources (AIM: PAF) moved with the sector, sliding 6%. South American based explorer Mariana Resources (AIM: MARL), which today announced a new set of positive drilling results, and Western Australia operating Norseman Gold (AIM: NGL) lost more than 5%.

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