By Paul Ploumis 25 Jun 2015 Last updated at 05:37:06 GMT
(Kitco News) -Gold prices ended the U.S. day session weaker and hit a nearly three-week low Wednesday. The overall technical posture of the yellow metal remains firmly bearish, and with a lack of major, markets-moving fundamental news this week, the chart-based sellers are in control. August Comex gold was last down $2.70 at $1,173.90 an ounce. July Comex silver was last up $0.118 at $15.89 an ounce.
The markets are focused on Greece this week, mainly because there is not much else happening on the world markets front. Greece and European Union officials are holding an emergency meeting in Brussels Wednesday to try to finalize a debt-restructuring and new funding deal. Reports late Wednesday said the EU and IMF had rejected Greece’s latest proposal, but the markets did not show much reaction to that news. The two negotiating parties had come closer to agreement on a deal earlier this week. The Wall Street Journal said Wednesday its reporters have seen a document that points out “stark divisions” still exist between Greece and its creditors. Greece’s prime minister is again making negative comments on the matter, reports said. Greece’s present arrangement with its creditors expires on June 30—at which time Greece could run out of cash and be in default on its IMF/EU loans. A summit of EU leaders is scheduled for Thursday and Friday.
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There was a downbeat economic report coming out of Germany Wednesday. The Ifo business confidence fell to 104.7 in June from 108.5 in May, and the lowest level since February. Worries about Greece are blamed on the decline in business confidence in Germany, which is the economic work horse of the European Union.
A news story Wednesday said Chinese consumer demand for gold has tapered off significantly this year (down just under 15% so far in 2015) due to many consumers preferring Chinese stocks over gold as an investment asset. The story said China gold imports could drop by 20% by the end of this year. However, the report also said consumer demand for gold in India is up this year, due to the easing of gold import restrictions by the Indian government. China and India are neck-and-neck the largest gold importers in the world.
An interesting report from the Paris-based OECD think tank said that life insurance companies and pension funds are at risk of insolvency in the coming years due to very low interest rates and the massive quantitative easing of monetary policies by the major central banks of the world. The OECD said world interest rates are expected to remain low for years to come. The OECD report also said the instability of life insurers and pension funds could spill over into other sectors of world economies.
The London P.M. gold fix is $1,173.75 versus the previous A.M. fix of $1,175.75.
Courtesy: Kitco News