Gold Struggles to Stay Above 1200
Frankfurt (Feb 18) Gold prices are stable on Wednesday, following sharp losses a day earlier. In the European session, the metal is trading at a spot price of $1205.27. On the release front, it’s a busy day, with the release of Building Permits and PPI. The highlight of the day is the Federal Reserve minutes.
The Greece bailout crisis continues to swirl this week, as Eurozone finance ministers (Eurogroup) abruptly halted talks on Monday aimed at reaching an agreement between Greece and its creditors. The bailout agreement expires at the end of February, and Eurogroup head Jeroen Dijsselbloem said that Greece must accept the next installment of funds under current bailout conditions. For its part, Greece has demanded easier austerity conditions while continuing to have access to bailout funds. Another meeting of the Eurogroup has been planned for Friday, and the markets will be nervously following developments on the bailout front during the week. The stakes are high, as lack of an agreement could lead to Greece leaving the Eurozone and abandoning the euro.
The markets are keeping a close eye on the Fed minutes, which will be released later on Wednesday. With the US economy showing strong growth and positive employment numbers, there are widespread expectations for a rate hike as early as the summer. Any hints regarding a hike could provide a strong boost for the US dollar against its major rivals.