Gold price stable ahead of ‘emergency’ Greek summit

Otmane El Rhazi from The Bullion Desk.

Gold held above the psychological $1,200 level in the US on Friday morning ahead of a meeting of EU leaders on Monday to try once again to devise a resolution to the Greek debt crisis.

Gold for August delivery on the Comex division of the New York Mercantile Exchange was last unchanged at $1,202.00 per ounce. Trade is locked into a tight range of $1,198.0-1,203.30.

Eurozone leaders will confer on Monday at an emergency summit to attempt to break the impasse, with Greece having only 12 days to make a 1.6-billion-euro repayment to the IMF.

“[But] we believe that the prospects of agreement being reached are more than doubtful,” Commerzbank said. “In any case time is running out, making the scenario of Greek sovereign bankruptcy increasingly realistic.”

There is a growing possibility of a run on Greek banks, which could lend support to gold prices even with subdued physical demand in both China and India, Commerzbank added.

IMF managing director Christine Lagarde has reaffirmed that there will be no grace period or delay to payments and Greece must pay up by June 30 or face default. The European Central Bank is reportedly holding its own emergency meeting to discuss the extension of emergency liquidity assistance to Greece.

The lack of resolution and clarity could lead to trepidation among market participants as the market inches closer to the weekend, one commentator said.

“We suspect that trading conditions will lighten up over the course of today’s session as participants move to the sidelines ahead of Greek uncertainties, as the possibility of capital controls being imposed on the country is not out of the question, come Monday,” Edward Meir, analyst at INTL FCStone, said.

In eurozone data, the current account in April was 22.3 billion euros, above forecasts of 18.1 billion euros, while Germany’s PPI in May was unchanged but missing off estimates of a 0.2-percent increase.

Turning to world markets, Germany’s DAX and France’s CAC-40 were both one percent higher, with the euro last 0.3 percent weaker at 1.1334 against the dollar.

As for other precious metals, Comex silver for July delivery was teetering around $16.150 per ounce. Trade has ranged from $16.050 to $16.190.

Platinum futures for July delivery on the Nymex were up $4.10 at $1,086.90 per ounce, while the most actively traded palladium contract was at $718.00, down $0.65.

(Additional reporting by Ian Walker, editing by Mark Shaw)

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