Gold price firm as Greece stares down an exit

Otmane El Rhazi from The Bullion Desk.

The gold price once again held firm on Tuesday as traders continue to shrug off any looming volatility from the Greek ‘no’ vote.

Spot gold was last down $2 on the previous session at $1,166.80/1,167.60 per ounce, having traded within an intraday range of $4 so far today – the metal is however holding its value – down only 0.6 percent for the week.

Once again, there appears to be a distinct lack of safe-haven bid despite the crisis in Greece. Investors are seeking alternative safe-havens in the form of US treasuries and German debt – the yield on the later down 6.45 percent.

Greece will be given another chance to present new reforms in Brussels today, with the country nearing a messy exit from the eurozone should it fail to come to some form of agreement.

German Chancellor Angela Merkel has warned that time is running out for the Greeks.

“As far as gold is concerned, any movement towards an agreement will likely mean that gold’s ‘staying power’ at current levels will prove to be short-lived and so we are not as sure as we were yesterday that the precious metal will be able to move higher given the compromising rhetoric we have been hearing today,” INTL FCStone’s Edward Meir said in a note.

European equity markets were all in negative territory and the euro was down to 1.0963 against the dollar.

Asian markets were a little more mixed, the Nikkei closing in positive territory but the Shanghai Composite resumed last week’s rout – closing down 1.76 percent despite a wave of new measures introduced at the beginning of the week.

In data, German industrial production came in at zero percent, the French government budget balance at -63.9 billion euros and the trade balance at -4 billion euros.

Still to come this afternoon out of the US will be JOLTS jobs openings and the US trade balance.

In other metals, silver was last down four cents at $15.63/15.68 per ounce. In the PGMs however, the rout continues in the face of falling oil and base metals prices. Platinum hit a fresh six year low on Monday at $1,048 per ounce, while palladium came just short of a fresh two-year low at $666.

This morning, palladium is down $1 at $677/682 and platinum is down $3 at $1,057/1,062.

“Any lasting price increase will doubtless require a significant revival in investment demand, however – which as yet has not been forthcoming,” Commerzbank said in a note.

Platinum ETFs saw outflows of 40,000 ounces in the first half of the year, while palladium ETFs lost as much as 100,000 ounces, it added.

(Editing by Tom Jennemann)

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