Gold price stable, Greek debt negotiations could lend support

Otmane El Rhazi from The Bullion Desk.

Gold was little changed in the Asian trading hours with investors watching developments in the Greek debt negotiations.

The spot gold was last at $1,182.5/1,183.4 per ounce, up $1 on the previous close. Trade has ranged from $1,181.4 to $1,184.0 so far.

“Greek debt negotiations have the potential to lend modest support to gold,” HSBC said.

“So far gold has only been mildly supported by the ongoing Greek saga. But were the situation to turn more uncertain and the possibility of default appear more likely, gold could be a beneficiary,” it added.

Last night IMF spokesman Gerry Rice announced that its delegation had left negotiations in Brussels claiming that there are “major differences” between creditors and Greece “in most key areas” of negotiations on the country’s bailout.

Weighing on gold was overnight data from the US – retail sales for May came in at 1.2 percent, against forecasts of 1.1 percent and well above the previous figure of 0 percent.  The core figure, which strips out the volatile elements, also bettered expectations at 1 percent against consensus at 0.7 percent.

The figures suggest that household spending is finally beginning to reflect job growth and lower gasoline prices and more importantly, that growth in the second quarter will bounce back from the contractionary territory of the first quarter.

In other data, weekly US jobless claims were as expected, in at 279,000, while import prices bettered consensus at 1.3 percent.

Meanwhile, gold ETF outflows continue “at the rate of knots with net length down 2.5 percent since the beginning of May,” Triland noted.

Data today includes German WPI and eurozone’s industrial production. From the US, PPI, core PPI, preliminary University of Michigan consumer sentiment and inflation expectations are due for release.

In other precious metals, silver was little changed at $15.95/16.00. Platinum at $1,101/1,106 was down $5 and palladium at $742/748 edged $1 higher.

On the Shanghai Futures Exchange (SHFE) gold was little changed – it was last at 239.70 yuan per gram.

 

The post Gold price stable, Greek debt negotiations could lend support appeared first on The Bullion Desk.