Gold: In Holding Pattern While Greece Bailout In Spotlight

New York (Feb 11)  Gold prices are unchanged on Wednesday, as the metal is trading at a spot price of $1236.32. It’s a quiet day on the release front, with no major US events on the schedule.

The markets remain focused on Greece, as the bailout crisis continues. After the new Greek government said it would not renew the EUR 240 billion bailout under the current terms, the ECB announced that it will no longer accept Greek government bonds as collateral for ECB loans as of February 11.

Greece is proposing a new 10-step deal that removes the harsh austerity steps, which Greece has called “toxic”, required under the bailout. However, Germany and Greece’s international creditors do not want to rewrite the bailout agreement. On Wednesday, EU finance ministers are meeting in Brussels, with the Greek crisis on top of the agenda. If there are any major announcements out of Brussels on Wednesday, we could see some movement from EUR/USD.

US employment numbers continue to impress, as JOLTS Jobs Openings climbed to 5.05 million, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a solid US Nonfarm Payrolls report for January, which was released on Friday.

The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so these strong employment releases reinforce expectations for an interest rate in mid-2015, which would be a major boost for the US dollar.

Source: Investing.com