Gold price back below $1,200, all precious metals sell off

Otmane El Rhazi from The Bullion Desk.

The gold price was back below the psychological $1,200 mark, with all the precious metals hit in a cross-complex sell-off on Monday afternoon.

Spot gold at $1,193.90/1,195.70 per ounce was down $8.40 on the previous session’s close, having hit an intraday low of $1,191.20 and a high of $1,209.20. Silver followed gold lower to $15.90/15.95, down 32 cents, below the key $16 mark and its lowest in a month.

The drop coincided with a strong start on the New York stock markets that drove money out of the precious metals complex – the Dow was last up 1.31 percent, the S&P 500 up 1.04 percent and the Nasdaq up 1.2 percent.

As well, the euro is stumbling on renewed uncertainty over Greece’s future in the eurozone. With Greece yet to provide the list of comprehensive reforms that it needs to avoid a default, the single currency was last two-fifths of a cent lower at 1.0762 against the dollar.

The Greek Finance Ministry has said that the country’s cash balance will be negative from April 20 – it needs $2.16 billion to pay public sector wages this month though it must also pay the IMF around 1 billion euros on May 12.

Eurozone finance ministers are set to meet on Friday; any further signs that a deal might not being reached will raise the prospect of a Greek exit – or ‘Grexit’ – from the bloc.

The metals also ignored aggressive stimulus measures carried out by the PBoC over the weekend – it made a 100-basis-point cut to the reserve requirement ratio.

In the PGMs, platinum was last down $18 at $1,142/1,152 per ounce, while palladium was down $6 at $771/776.

 

(Editing by Mark Shaw)

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