By Paul Ploumis 02 Jul 2015 Last updated at 03:13:46 GMT
(Kitco News) - Gold prices ended the U.S. day session slightly lower Wednesday, as world trader and investor risk appetite was on the upswing, which is bullish for the stock markets but bearish for safe-haven gold. A firmer U.S. dollar index was also a negative for the precious metals markets Wednesday. August Comex gold was last down $1.70 at $1,170.10 an ounce. September Comex silver was last up $0.014 at $15.60 an ounce.
As expected, the Greece government did not make a 1.5 billion Euro debt payment Tuesday and is now in default on its loans from the International Monetary Fund and European Union. However, investor risk appetite was on the upswing Wednesday as there were reports Greece and the IMF/EU are again close to an agreement on a debt restructuring and financial aid package that will keep Greece in the EU. However, the market place has recently heard this before, only to see the negotiations fall apart. Reports Wednesday said the two negotiating parties will continue discussions on a deal next week. Reports said the July 5 Greece referendum on acceptance of austerity measures will go ahead as planned. News reports also said the Germans are still not happy with Greece’s proposals.
The Greece debt situation remains fluid and the market place will continue to keep a close watch on developments. However, there is not high anxiety in the market place from the events surrounding Greece and Puerto Rico debt problems—at least not yet. Apparently traders and investors reckon Greece is a very small player on the world markets scene. Still, there remains the risk of a financial market contagion suddenly developing. So market participants cannot become too complacent.
There was a heavy slate of U.S. economic data released Wednesday, which was mostly upbeat, and that also fell into the gold bears’ camp. The ADP national employment report showed there were 237,000 jobs added in June, which was in line with market expectations but still considered a good reading.
The Greece news overshadowed some downbeat economic data coming out of China Wednesday. China’s official manufacturing purchasing managers’ index came in at 50.2 in June from the same reading in May. A slight rise in the PMI was expected. A reading above 50.0 suggests expansion in the sector. Last weekend China eased its monetary policy in an effort to stimulate domestic economic growth.
Traders and investors are awaiting Thursday morning’s U.S. employment report for June from the Labor Department—released one day early due to the U.S. Independence Day holiday on Friday. The key non-farm payrolls number of the report is expected to come in at up around 230,000. Some markets could get very active in the immediate aftermath of the report, especially if it’s a big miss on the non-farms number. But then look for trading action to quickly taper off Thursday as traders hit the exit doors to get an early jump on the long holiday weekend.
The London P.M. gold fix is $1,168.00 versus the previous A.M. fix of $1,171.70.
Courtesy: Kitco News