Another day, another dead end for Greece as a resolution looks like it will never happen. With the Troika’s plans on the table, the question of what to do to resolve the crisis seems to be taking a political stance than what the correct course of action should be. With impending qelections, Samaras’ New Democracy is looking for an April election whilst the previous premier’s PASOK party wants more time to allow reforms to take place and have the desired effect. Amongst this political backdrop, social and union unrest are never far away and Greece’s two largest unions have protests scheduled for today. All of this is clearly unwelcomed by the market who have effectively priced a lack of resolution in to the markets in the short term. Long term implications however are somewhat different. With the Greek recession moving in to its fifth year, disorderly default on its €14.4bn bond payment imminent and no credible resolution in sight, the macroeconomic consequences will be severe, not only to the Euro zone and it’s currency, but the wider global economy.
Gold’s London AM fix this morning was USD 1,738.00, GBP 1,102.23, and EUR 1,317.27 per ounce.
Yesterday’s AM fix was USD 1,720.50, GBP 1,097.40, and EUR 1,310.06 per ounce.
Gold Overview
Gold posted a decline yesterday on the back of renewed strengthening in the US dollar as global investors were again nervous about sovereign debt troubles in Europe. Expectations over the weekend that Greece might finally reach an agreement with its creditors did not materialize yet and that challenged the bullish momentum in the precious metal. Some technical considerations as gold’s price was getting too far above the moving averages might have also influenced investors’ decision to take profits off table thus pushing for $8.90 retracement to $1729.50.
Overview
The International Atomic Energy Agency started its visit to Iran with the focus on the Middle Eastern nation’s nuclear projects. The simple fact that there still is some sort of dialogue was enough to ease the energy sector’s concerns over crude supplies being disrupted, sending oil prices lower. At the same time, a return of the risk averse sentiment sent investors into the US dollar which in turn drove crude prices lower because they were made to look more expensive.
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