Gold Price Erases Losses After Greece Is Handed Revised Bailout Terms
London (Jun 24) Gold erased losses to trade little changed after Greece’s creditors handed the government revised terms for an agreement on bailout funds. Silver and palladium climbed.
The overhauled set of measures was passed to the Greek government on Wednesday morning. Prime Minister Alexis Tsipras, preparing for a Brussels meeting with the heads of three creditor institutions, expressed surprise that his own proposals had fallen short.
Gold is little changed in 2015, after two years of losses, as concerns over the possibility that Greece might default on its debts and be forced out of the European common currency supported demand for the metal as a safe haven even amid prospects for increased U.S. interest rates.
“Greece is on everyone’s mind at the moment, it is a common theme across markets including gold,” Jens Pedersen, a senior analyst at Danske Bank A/S, said by phone from Copenhagen. “Recent optimism that a deal is close weighed on prices, but the contrary comments from Tsipras have alleviated that somewhat.”
Gold for August delivery was little changed at $1,177.10 an ounce at 7:53 a.m. on the Comex in New York, after falling as much as 0.3 percent earlier Wednesday to the lowest since June 15. Bullion for immediate delivery was also little changed at $1,177.85.
The new terms were sent as Tsipras prepared for a Brussels meeting with the heads of the European Central Bank, International Monetary Fund and European Commission. Finance ministers will gather later in an effort to reach a deal before Greece’s bailout expires and about 1.5 billion euros ($1.7 billion) in payments come due to the IMF on June 30.
Bullion had fallen earlier Wednesday amid mounting optimism Greece would avoid default, and after U.S. housing data bolstered speculation interest rates will rise this year. Higher borrowing costs curb gold’s allure because the metal doesn’t pay interest or give returns.
Holdings in exchange-traded products backed by bullion slipped less than 0.1 metric ton to 1,590.3 tons as of Tuesday, halting a five-session climb that was the longest since April.
Silver for September delivery rose 0.7 percent to $15.88 an ounce on the Comex in New York. Platinum for October advanced 0.3 percent to $1,072.10 an ounce on the New York Mercantile Exchange. Palladium for September delivery climbed 1 percent to $702.55 an ounce.