Greek uncertainty pushes gold back
Profit taking has caused a decline in gold in early trading after it reached a week's high yesterday at $1159.84, as the Greek government requested the deployment of the 45 billion euro aid package provided by the EU and the International Monetary Fund (IMF).
Gold reached $1155.85 today, retreating 0.2%, while platinum rose by 0.6% to $1753.25. Palladium gained 1.7% advancing to $572.70 and silver ascended by 0.2% to $18.373.
The greenback appreciated against the euro after the German Finance Minister Wolfgang Schauble announced that Greece needs to provide clear commitment and plans on how to reduce its deficit in 2011 and 2012 and not only this year in order to receive further aid packages from the EU members. This may raise doubts whether Germany, the biggest contributor to the aid package, will show consent in aiding Greece.
The markets are in an alert state as they wait for the Greek finance minister to negotiate fund for the debt that matures May 19. All eyes are on Germany which may back away from the aid package aimed at reducing the 12.7% Greek budget deficit.
Gold is expected to remain stable at current prices, until a final solution for the Greek crisis will be found. The future outlook for precious metals is nonetheless bright, as platinum and palladium will be supported by Asian growing industries, while gold and silver will benefit from the global financial recovery.
S&P GSCI closed unchanged yesterday at 548.86, while RJ/CRB lost 0.67 points and closed at 278.38.
Gold futures due June at 2:44 EST fell by 0.05% to $1153.400, while silver futures retreated by 0.099% to reach $18.270 and copper futures fell by 3.600% to $351.200.