Gold Price flat to weaker in early Asia with attention set on Greece debt
Shanghai (Apr 22) Gold prices were flat to weaker in Asia on Wednesday as investors eyed euro zone woes over Greece that threaten to lead to a possible exit of the single-currency union.
On the Comex division of the New York Mercantile Exchange, gold for June delivery eased 0.04% to $1,202.60 a troy ounce.
Elsewhere, Silver futures for May delivery fell 0.09% to 15.993 a troy ounce.
Copper for May delivery rose 0.11% to $2.698 a pound, after a bond default in the Chinese construction sector. Kaisa Group Holdings, a Shenzen-based company, became the first Chinese property developer to default on its dollar bonds, after it failed to meet a coupon payment on two notes on Monday.
China accounts for more than 40% of the world's copper consumption with houssing and construction major users of the commodity.
Overnight, gold futures edged up on Tuesday reversing some of its losses during the previous session, as a potential Greek default on its sovereign debt remained in focus.
On Tuesday, Jeroen Dijisselbloem, the head of the euro group of prominent finance ministers, steadfastly insisted that Greece must meet all of its obligations in the coming weeks if it wants to remain in the euro zone. Next month, Greece owes the International Monetary Fund a payment of more than €773 million on a loan under the IMF's first Greek bailout in 2010, before it must meet two separate obligations of more than €300 million to the IMF in June.
By late-July, Greece owes an additional €3.45 billion to the European Central Bank for bonds related to a 2012 default.
"The money is starting to run out," Dijisselbloem told European broadcaster RTL.
Dijisselbloem remained adamant that every effort must be undertaken to prevent a Greek exit from the euro zone, a move that has earned the popular moniker "Grexit," in recent weeks.
"If Greece leaves the euro zone you would get very dangerous instability," he added. "It's in the interests of Greece and the euro zone as a whole to avoid that."
The sentiments were echoed on Tuesday by Jason Furman, the chairman of the White House Council of Economic Advisers. It is commonly thought by a number of economists that a Greek departure from the euro zone could have a contagion effect, impacting countries such as Spain, Italy and Portugal whose yields on its government debt have slipped into negative territory.
"A Greek exit would not just be bad for the Greek economy, it would be taking a very large and unnecessary risk with the global economy just when a lot of things are starting to go right," Furman said in an interview with Reuters.
Athens officials on Monday reportedly issued a decree to local governments forcing them to transfer all cash balances to the Greek Central Bank ahead of Friday's critical meeting of euro zone finance ministers in Latvia. Greece prime minister Alexis Tsipras is expected to present a revised list of reform measures that could unlock a vital financial lifeline to the cash-strapped country. The effort could raise about €2 billion, according to multiple reports.