GOLD BULLION held little changed against major currencies on Wednesday in London, trading in a tight range at 2-week lows against the Dollar as commodities fell further but European and US stock markets reversed yesterday's drop.
US Treasury bond yields edged higher as German and other northern Eurozone yields eased back, and Greek yields dropped almost 0.9 percentage points after Greece's prime minister Alexis Tsipras said talks with Eurozone lenders to extend the current bail-out were in "the final stretch".
European Commission vice president Valdis Dombrovskis countered that "we are still not there yet.
"The ongoing Greek saga is likely to come to a head in June," says Swiss refining and finance group MKS in a note, "which will provide underlying safe-haven support."
But after Tuesday's sharp $20 drop in Dollar gold prices, Wednesday proved "another quiet day," counters one market-maker's trading desk, saying there was "no meaningful activity" in London's wholesale bullion market.
Tuesday's drop "should really have been of no surprise to anyone," says David Govett in London for the Marex Spectron brokerage, and "We should now see some small resumption of physical demand at the lower levels.
"But on the whole the next move will as usual be dependent on the Dollar."
Trading volumes on the Shanghai Gold Exchange rose today from Tuesday's multi-month low, but the premium for bullion delivered in China – over and above comparable London quotes – held at a modest $1.80 per ounce by the close.
Bullion holdings at the giant
iShares Silver Trust (NYSEArca:SLV) meantime ended Tuesday at a new 12-month low, dropping 10% from last September's 3-year high with 9,857 tonnes needed to back the trust's shares in issue.
Silver prices tracked gold bullion on Wednesday, setting a new 2-week low at $16.62 and dropping over a Dollar per ounce from last week's 4-month peak.
"The markets are wrongly focused on this move," says US brokerage INTL FCStone analyst Edward Meir, "as opposed to looking down the road and discounting the likelihood that [the Fed] will likely stop there, especially if the economy remains sluggish."
