By Paul Ploumis 30 Jun 2015 Last updated at 06:38:50 GMTModest Rally for Gold Amid
(Kitco News) -Gold prices saw tepid safe-haven demand and some short covering Monday as the Greece debt crisis worsened over the weekend. World markets are upset, but not in a panic, on the latest Greece developments. Gold quoted in Euros did see much better price gains Monday, reports said. August Comex gold was last up $6.50 at $1,179.80 an ounce. September Comex silver was last down $0.048 at $15.72 an ounce.
The Greece-European Union debt restructuring/bailout talks produced no weekend agreement and the situation has deteriorated. Greek banks were closed for a few days starting Monday and Greece’s prime minister has called for a July 5 referendum on new austerity measures. Greece’s present arrangement with its EU/IMF creditors expires on Tuesday—at which time Greece also needed to make a big debt payment to its EU/IMF creditors. That won’t happen as the EU has reportedly suspended all cash disbursals to Greece. Greece is now closer than ever to exiting the European monetary system. Talks between the two parties continue.
Part of the reason gold did not see bigger price advances during the day Monday is that the U.S. dollar index backed off sharply from its overnight gains, to trade lower on the day. Meantime, the Euro currency shed all of its solid overnight losses to trade higher by the end of the U.S. day session. This suggests the market place could have just experienced a speed bump with the Greek news getting worse. Still, it’s too early to gauge how markets will play out the rest of this week. Given gold traders’ fickle collective nature, the yellow metal still could see strong safe-haven demand by the time the week’s is at an end.
There were also reports Monday that Puerto Rico can’t pay its sovereign debt. The main worry in the market place is a financial contagion and loss of faith in the European Union’s and/or Asia’s financial systems. Most Asian and European stock and financial markets were under strong selling pressure Monday, with U.S. stock indexes also lower.
U.S. Treasuries saw strong price gains Monday, on safe-haven demand. Greek two-year bond yields soared to 33% Monday.
China’s central bank lowered its interest rates over the weekend, in order to jumpstart increased growth in the world’s second-largest economy. However, China’s stock market sold off anyway on Monday. The Greece crisis overshadowed the China rate cut.
The London P.M. gold fix is $1,176.00 versus the previous A.M. fix of $1,176.50.
Courtesy: Kitco News