Gold slips as Greek negotiations reach another roadblock

Otmane El Rhazi from The Bullion Desk.

Gold prices declined at the start of US trade as Greece’s creditors rejected the country’s recent proposals, increasing the odds of an exit from the bloc.

Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $4.30 or 0.4 percent to $1,172.30 per ounce. Trade has ranged from $1,168.10 to $1,179.10.

Yesterday’s hopes that Greece can secure a bailout deal this week have already soured – while some of the country’s creditors do not feel the proposal goes far enough. Prime Minister Alexis Tsipras faces a tough sell of fresh austerity measures to his own party, his coalition partners in government and the Greek public.

“This evening will see eurogroup finance ministers attend a special summit aimed at finally reaching an agreement in the debt dispute with Greece,” Commerzbank said. “Although this appears possible in light of the latest proposals made by the Greek government, it is questionable whether a long-term solution can be found.”

Greek equities have fallen while major European bourses are little changed, The markets are now waiting for fresh developments from this evening’s third eurogroup meeting this week, a summit of European leaders on Thursday. If a deal is reached, then there would be a three-day debate in the Greek parliament, where the deal must be approved before Greece receives any aid.

In data today, German Ifo business climate for June was at 107.4, below forecasts of 108.2, while US final GDP quarter-over-quarter in March was in-line with estimates of a 0.2 percent decline.

Meanwhile in wider markets, Germany’s DAX and France’s CAC-40 were down 1.2 percent and 0.7 percent respectively, while the euro was 0.2 percent stronger at 1.1194 against the dollar.

As for the other precious metals, Comex silver for July delivery was up 4.3 cents at $15.780 per ounce. Trade has ranged from $15.720 to $15.875.

Platinum futures for July delivery on the Nymex fell $1.70 at $1,065.80 per ounce, while the most-actively traded palladium contract was at $697.35 per ounce, up $1.60.

(Editing by Tom Jennemann)

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