Gold Price Up on Dissolution of Greek Debt Talks
Frankfurt (July 10) This past Friday, precious metals investors were waiting with bated breath to see how weekend Greek debt talks would go.
On Thursday, the country failed to reach a deal with its international creditors, and according to Reuters, was set to make a "last-ditch effort on Saturday either to avert a default next week or start preparing to protect the euro zone from financial market turmoil."
The gold price has traded between $1,160 and $1,230 per ounce since March, and hopes were high that the yellow metal and its white counterpart would rise following Greece's weekend talks.
Indeed, writing on Sunday, GoldSeek.com's Peter Cooper commented, "[g]old and silver will see a huge short covering rally on Monday that will lift prices out of their recent trading range and set the precious metals up for stellar price increases in the coming weeks and months."
Price bump smaller than expected
Unfortunately for fans of the metals, in reality the talks did little to bump up prices for either metal. While the gold price reached a high of $1,182.50 Monday morning, by 2:00 p.m. EST it was sitting back down at $1,178.15, just $10 off a three-week low hit on Friday. For its part, the silver price initially jumped to $15.87 Monday morning, then sank back down to $15.71.
Explaining that lackluster price activity, Jim Wyckoff of Kitco noted Monday that in short, "[w]orld markets are upset, but not in a panic, on the latest Greece developments."
Expanding on those developments, he said that Greece's talks with the European Union ultimately "produced no weekend agreement and the situation has since deteriorated." Currently the main issue is that Greece's arrangement with its European Union and International Monetary Fund creditors expires Tuesday — the country is supposed to make a 1.6-billion-euro debt payment to those creditors at that time, but as the European Union "has reportedly suspended all cash disbursals to Greece," there's no way for that to happen.
Source: TheStreet
