Gold hits 6-week high, Greece debt talks to be watched

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Gold jumped to its highest in more than a month on Monday as Tokyo futures rose on buying from investors, but gains could be limited by a weaker euro after Greece and its private creditors failed to strike a crucial deal to avoid a messy default.

Investors are also waiting for euro zone ministers to decide later in the day what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens.

Gold rose 0.75 percent to $1,670.18 an ounce by 0558 GMT as gains on Tokyo futures spilled into the cash market after hitting a high of $1,672.89, its strongest since mid-December.

Gold has risen more than 6 percent so far this year, but stayed below a lifetime high of around $1,920 hit last September.

A disaster in the euro zone would not necessarily spark gold buying as even gold would be seen as a risk and investors would likely be prompted to sell, while geopolitical risk such as tension surrounding Iran would boost the safe-haven appetite for gold."

The most active gold contract on the Tokyo Commodity Exchange, December, added 34 yen a gram to 4,149 yen after rising as high as 4,152 yen a gram, its strongest since mid-December.

"There's a little bit of buying, that's why we see a change in price trend. We've seen physical buying from the general public," said a dealer in Tokyo, referring to private investors.

But overall trading was slow in Asia because physical markets in China, Singapore, Malaysia and Indonesia were closed for the Lunar New Year break.

The euro slipped as caution returned on Greece's financing woes after Athens and its private creditors failed to agree on a debt swap deal that is vital to avert a chaotic default for Greece.