Gold gains but caution prevails amid ongoing Greek talks

Otmane El Rhazi from The Bullion Desk.

Gold rose today after poor data from the US, Europe and China preceded a Greek decision, which has given pause to market participants.

Gold for June delivery on the Comex division of the New York Mercantile Exchange closed up $7.5 at $1,194.3 per ounce. Trade ranged from $1,183.6 to $1,191.8.

In Greece, Prime Minister Alexis Tsipras met German Chancellor Angela Merkel at the EU summit in Brussels today. Without a substantial intervention by eurozone ministers on Friday, the Mediterranean country could default on their debt obligations.

The unresolved debt crisis has created a tepid market as traders look for any morsel of data.

“The lack of interest in precious metals is continuing to worry market participants and the net effect is likely to be a gradual slide lower,” Triland Metals said. “Sensitivity to data is exaggerated by the need for traders to find any catalyst to put towards the investing case.”

As for today’s data, US weekly unemployment claims increased to 295,000 in April, higher than the forecast of 288,000. US new home sales for March, meanwhile, came in at an annual rate of 481,000, which was 11.4 percent below the prior month and missed the 514,000 forecast.

In the eurozone, growth fell from March’s 11-month high with overall manufacturing PMI at 51.9 was short of the 52.6 consensus, as was the services number at 53.7 against forecasts of 54.5.

Earlier, the Chinese HSBC flash manufacturing PMI at 49.2 fell short of consensus at 49.5, while Japan slipped into a decline at 49.7 against expectations at 50.8.

According to industry officials, gold sales rose about 15 percent in rupee terms in India earlier this week during the Akshaya Tritiya festival, one of the busiest gold buying times of the year, MKS said.

In US equity markets, the Dow Jones industrial average and S&P were both up 0.5 percent, as the dollar gained less than a cent against the euro at $1.0838.

As for the other precious metals, Comex silver for May delivery was up three cents per ounce – trade has ranged from $15.74 to $15.92. Platinum for June delivery on the Nymex raised $7 to $1,137.7, while the most actively traded palladium contract was at $769.9, up $14.

In other markets, light sweet crude (WTI) futures were up $1.80 or 3.2 percent at $58.01 per barrel in the most active contract.

(Edited by Tom Jennemann)

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