Gold price holds below $1,200/oz as new Greek worries emerge

Otmane El Rhazi from The Bullion Desk.

The gold price held mostly steady on Monday; however, all eyes have shifted to Greece where a looming snap election in January could be bad news for the euro.

Gold for February delivery on the Comex division of the New York Mercantile Exchange was last down $3.20 at $1,192.10 per ounce. Trade has ranged from $1,190.50 to $1,197.50.

“Gold had a very firm post-Christmas session on Friday rallying back up towards the $1,200 level before settling around $1,194. The move was initiated in Asia on the back of a strong SGE premium, and the buying interest continued during London time despite London out for the Boxing Day holiday,” MKS Finance said in a note.

“With low volumes and poor liquidity at present, gold could really move either direction but we suspect that $1,200-$1,205 should be heavy on the topside and $1,170-$1,175 should still attract decent Asian physical demand short term,” it added.

Today is light on the data side, with no frontline figures due. But Tuesday and Wednesday keynote economic releases will be compressed ahead of the January 1 holiday. Notable figures include China’s final HSBC flash PMI on Tuesday, with US Tuesday/Wednesday releases including consumer confidence, weekly jobless claims, the Chicago PMI and pending homes sales, among others.

Meanwhile, in the wider-markets, the dollar was 0.16 percent softer at 1.2202 against the euro, while Germany’s DAX and France’s CAC-40 were down 0.84 percent and 0.66 percent respectively.

Nevertheless, the euro is nervy after parliamentary vote in Greece failed to elect a new president, paving the way for a snap election that could empower anti-austerity independence parties.

“New Democracy and its allies in coalition will fail to gain a majority and the far-left-of centre Syriza Party will likely become the largest minority party and will succeed in piecing together a new left-of- centre coalition including the Communists and other allies on the left,” Dennis Gartman, editor of the Gartman Letter, said.

“The latest several polls taken in the past few days have Syriza with the support of somewhere close to 28 percent of the nation’s voters, while New Democracy has the support of 25 percent. This is a bit narrower in Syriza’ s favour of two weeks ago but it is still an indication that the nation’s votes are tired of New Democracy’s programme that has included the strident austerity demands put upon Athens by the Troika,” he added.

As for the other precious metals, Comex silver for March delivery were down 6.2 cents at $16.085 per ounce. Trade has ranged from $16.00 to $16.255.

Platinum futures for April delivery on the Nymex were down $5.20 at $1,214.70 per ounce, while the most-actively traded palladium contract was at $817.65 per ounce, down 95 cents.

(Additional reporting by Tom Jennemann)

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