Gold little changed as Greece talks continue

Otmane El Rhazi from The Bullion Desk.

Gold prices rose in the early morning US trading period as negotiations between the eurozone and Greece reach a critical juncture.

Gold for August delivery on the Comex division of the New York Mercantile Exchange was last up $3.70 to $1,171.80 per ounce. Trade has ranged from $1,168.50 to $1,177.10.

Greek officals delayed a 300-million-euro repayment to the IMF until the end of June, increasing the risk of a Greek exit from the bloc. Angela Merkel, Germany’s Chancellor, said today in a speech that “there isn’t much time left”.

But gold hasn’t benefited from this uncertainty. A bigger driver has been US data – total non-farm payroll employment increased to 280,000 in May, besting the forecast of 226,000, which sent the price of the yellow-metal tumbling below support of $1,170.00.

“Despite the Greek saga entering a crucial phase, gold has failed to garner safe-haven interest,” Barclays Research said. “Instead, the yellow metal has retained its focus on the strength of the US macro data and timing of the first rate hike. Following the stronger-than-expected non-farm payrolls data, our economists maintain their call for a September hike.”

Gold should increasingly face downward pressure as the summer is a seasonally slow period for demand, Barclays added.

A close in the near-term below $1,170 could signal bearish technicals and a decline to $1,142.93, the low of March 17, according to UBS.

In European news and data, German industrial production at 0.9 percent surpassed expectations at 0.6 percent, as did the country’s trade balance at 22.3 billion euros against consensus at 18.1 billion euros. But EU Sentix investor confidence disappointed at 17.1.

In equities, Germany’s DAX and France’s CAC-40 were down 1.1 percent and one percent respectively, while the euro is currently 0.9 percent stronger at $1.1212 against the dollar.

As for the other precious metals, Comex silver for July delivery was last down 3.10 cents at $16.015 per ounce. Trade has ranged from $15.950 to $16.110.

Platinum futures for July delivery on the Nymex were up $7.70 at $1,099.7 per ounce, while the most-actively traded palladium contract was at $748.00 down $2.95.

(Editing by Tom Jennemann)

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