Gold under pressure, market awaits outcome of Greek talks 

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The gold price dropped back below $1,200 on Monday morning while crunch talks between Greece and European creditors take place.

Spot gold was last at $1,197.20/1,198.00 per ounce, down $2.40 on Friday’s close. Silver was up five cents at $16.09/16.14.

The market is widely predicted to be quiet today, MKS noted this morning, ahead of any decision in today’s crucial talks between Greece and its creditors at an emergency meeting and while Chinese markets are closed.

Five months of deadlock could be reversed today in Brussels, with Greece now just days from the June 30 deadline to repay 1.6 billion euros owed to the International Monetary Fund (IMF). Failure to make this payment could result in a messy exit from the eurozone – the so-called ‘Grexit’.

According to reports, however, Prime Minister Alexis Tsipras put forward a new list of reforms last night to appease creditors; these seem to have been well received, with markets optimistic this morning that a deal can be reached.

In equities, the Euro Stoxx was last up 2.53 percent, the Dax 2.59 percent and the Cac 40 2.51 percent after a positive session in Asia, with the Hang Seng up 0.86 percent and Nikkei 1.26 percent. The euro has also ticked slightly higher to 1.1370 against the dollar.

Still, the jury is out on the extent of the Greek saga’s influence on gold and what effect a resolution – or a Grexit – would have.

“While we believe the floor for prices remains soft in the coming weeks, the events surrounding Greece in the coming sessions could still reignite interest in gold,” Barclays noted this morning.

But failure to do so is only likely to exacerbate investor fatigue with gold, it added.

“The danger is a Greek deal leads to another wave of long liquidation; conversely, if the market has been too complacent over Greece, a move in the gold price above $1,210 could start to trigger short-covering,” FastMarkets analyst William Adams said.

Meanwhile, the rug has been pulled from underneath palladium, with the metal looking susceptible to dropping below $700 for the first time in four months. The metal was last at $703/708 per ounce, its lowest since February 3.

Platinum, at $1,073/1,078 per ounce, down $8, is struggling just above fresh six-year lows

There are no numbers of note due for release today and Chinese markets are closed until tomorrow for the annual Dragon Boat Festival holiday. A spate of manufacturing data from all major economies is due on Tuesday.

Source: thebulliondesk – Gold under pressure, market awaits outcome of Greek talks

 

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