Gold & Silver

Gold treads water as Greek talks eyed

Reuters Singapore | Updated on January 24, 2018 Published on February 20, 2015

gold

Gold was little changed on Friday as investors eyed talks over Greek debt, but the metal was headed for its fourth straight weekly dip as a last-minute deal was expected, while a strong dollar also weighed.

Spot gold was steady at $1,208.09 an ounce by 0043 GMT, after dropping 0.5 per cent in the previous session. The metal has lost 1.7 per cent for the week.

Greek’s proposal rejected

Germany rejected a Greek proposal for a six-month extension to its euro zone loan agreement on Thursday, saying it was “not a substantial solution’’ because it did not commit Athens to stick to the conditions of its international bailout.

Euro group meet

Berlin’s stance set the scene for tough talks at a crucial meeting of euro zone finance ministers on Friday. Greece’s leftist-led government is scrabbling to avoid running out of money within weeks and will face pressure to make further concessions in Brussels.

As the biggest creditor and EU paymaster, Germany has the clout to block a deal and cast Greece adrift without a lifeline, potentially pushing it towards the euro zone exit. But some officials in other capitals saw the German response as tactical and forecast agreement by the week-end.

Bullion had initially seen some safe-haven bids as the uncertainty over the crisis dragged on, but the expectation of a last-minute deal has hurt gold.

Dollar vs other currencies

Also adding to pressure was the US dollar, which gained against major currencies on Thursday after traders discounted Wednesday’s cautious minutes from the latest Federal Reserve policy meeting and believed the Fed could hike interest rates by June.

That view was also supported by strong economic data on Thursday showing the number of Americans filing new claims for unemployment benefits fell more than expected last week, signs the labour market was gathering steam.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies, while higher interest rates would also dent the appeal of non-interest-bearing gold.

In other industry news, gold imports to top consumer India are set to jump in coming months after the central bank eased gold import curbs, ahead of an expected cut in import duty in next week’s federal budget.

Published on February 20, 2015
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