Gold price drifts as endless Greek talks drag on

San Francisco (Jun 24)  Gold posted a small loss in light volumes on Wednesday as the market has clearly become fatigued by the ceaseless machinations in the Greek debt saga. Gold for August delivery on the Comex division of the New York Mercantile Exchange closed down $3.70 at $1,172.90 per ounce. Trade ranged from $1,168.10 to $1,179.70. “Gold’s movements have continually hinted at lower prices,” Triland Metals noted. “With subsequent failures at lower highs in the medium term we have been gradually wedging around the $1,200 level.” “We are noticing that short term technical levels are much more precise on rally selling and a little more flaky on the dip buying.

That said without a convincing break out of the $1,175-$1,225 range we remain in aimless meanderings that have plagued the gold and silver market since the first quarter this year,” it added. Hopes that Greece can secure a bailout deal this week have become complicated – some of the country’s creditors do not feel the proposal goes far enough, Prime Minister Alexis Tsipras faces a tough sell of fresh austerity measures to his own party, his coalition partners in government and the Greek public. There is talk that Greece has rejected an IMF counter-proposal seeking more pension and spending cuts. Financial markets will monitor developments from this evening’s third eurogroup meeting this week, a summit of European leaders on Thursday and, if a deal is reached, possibly a three-day debate in the Greek parliament where it must be approved before the country receives any aid.

Elsewhere, in better news, the Indian monsoons have started, dropping enormous sums of rain, which should make farmers happy, Dennis Gartman, editor of the Gartman Letter, said. “For the gold market this is great news for farmers are the bulwark of the gold market in India which remains either the first or second most important buyer of gold at any one time, vying with China for that honour. Happy Indian farmers are historically buyers of gold. They have been so for ages; they will be so again,” Gartman said. On the data side, the final reading of US first-quarter GDP showed the expected 0.2-percent decline, while earlier the German IFO business climate at 107.4 came in short of forecasts of 108.2. In the wider-markets, the euro was 0.39 percent stronger at 1.1211 against the dollar, while the Dow Jones industrial average and S&P 500 were down 0.76 percent and 0.56 percent respectively.

As for the other precious metals, Comex silver for July delivery was up 12.8 cents at $15.865 per ounce. Trade ranged from $15.720 to $15.885. Platinum futures for July delivery on the Nymex closed up $6.60 at $1,074.10 per ounce, while the most-actively traded palladium ended at $695.70 per ounce, down 5 cents.

Source: FastMarkets