Gold rebounds a touch but still in negative territory

Otmane El Rhazi from The Bullion Desk.

The gold price remained near three-week lows on Wednesday afternoon after Greek Prime Minister Alexis Tsipras doubled down on Sunday’s referendum.

Spot gold was last at $1,169.90/1,170.70 per ounce, down $3.30 on Tuesday’s settlement, but up from this morning’s low.

Demand for the precious metal as a safe haven is uncharacteristically soft – Tsipras announced today in a press conference that the June 5 referendum will proceed and encouraged Greek citizens to vote against to further austerity measures proposed by its creditors as part of a cash-for-reforms deal.

A rejection of those proposal could spell the end of Greece’s membership of the eurozone. The country declined to repay a 1.6 billion-euro-loan to the International Monetary Fund (IMF) yesterday.

In equities, Germany’s DAX and France’s CAC-40 were last up 2.2 percent and 1.9 percent respectively while the Dow Jones industrial average and S&P were up 0.7 percent and 0.6 percent respectively

The euro was 0.6 percent weaker at $1.1076 against the dollar.

In the US data, the ADP report showed 237,000 private-sector jobs were added last month against expectations of 218,000. The more comprehensive non-farm payrolls report is seen showing 230,000 new jobs were created last month, down from the 280,000 increase in May. In other US figures, the June ISM manufacturing PMI was 53.5 against a forecast 53.2.

Earlier, China’s HSBC final manufacturing PMI for June at 49.4 was below expectations of 49.6 but above 49.2 in May. The official manufacturing PMI at 50.2 in June was unchanged from the previous month while the non-manufacturing index rose to 53.8 from 53.2.

Germany’s PMI at 51.8 was as expected as were the Italian and French readings at 50.7 and 51.9 respectively. The Spanish PMI undershot at 54.5 but the EU final reading was as expected at 52.5.

In the other metals, silver was effectively unchanged at $15.60/15.65 per ounce, platinum was up $12 at $1,086/1,091 and palladium jumped $28 to $697/702.

 

(Editing by Mark Shaw)

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