GOLD PRICES fell hard against a rising Dollar in London trade Wednesday, but held dead-flat for Euro traders as a resolution to the latest Greek debt crisis was thrown into doubt.
The US currency rose on the forex market after new data showed the US economy shrinking only 0.2% per year in the first quarter, markedly less than first estimated.
With Greek bond prices slipping, and Germany's Dax stock index turning an earlier 0.5% gain into a near-1% loss, Tsipras was
due to fly back to Brussels on Wednesday for fresh talks.
"Event risk remains high," says the Hong Kong team at Japanese trading house Mitsui Global Precious Metals.
Greece's concessions at Monday's Eurogroup meeting "result[ed] in a swift drop for gold through intra-day supports," they add.
"Gold has resumed its downtrend," agrees the trading desk at London market makers Societe Generale, "on the back of renewed optimism for a Greek resolution.
"Equities cheered a possible agreement and gold took the beating."
But with that solution on Greece now uncertain – and equities retreating sharply –"Gold has traded in a very narrow range, with the market waiting to see what happens," says China-owned ICBC Standard Bank.
"There is still a high degree of uncertainty with participants instead seeming happy to sit on the side-lines."
Over in Asia, and "with China returning from their holiday [Tuesday]," notes the trading desk at Swiss refining and finance group MKS, "they had last seen the metal trade above a $1200 spot price.
Premiums on gold bullion delivered inside Shanghai's free-trade zone and dealt via the SGE's international bourse rose to $2.50 per ounce over London quotes – the top end of the last month's range.
One day before global trade body the London Bullion Market Association holds its annual Asian forum in Shanghai, Reuters on Wednesday quoted Chinese 'sources' saying that Beijing is
about to approve a Yuan-denominated price benchmark – akin to London's 100-year old Gold Fix, now set in Dollars via the legally-regulated LBMA Gold Price auction.
China's Zijin Mining – the world's No.1 gold miner by market cap, and the largest miner in what has been the world's No.1 gold-mining nation since 2007 – said yesterday it is
extending the $1 billion of acquisitions made over the last 12 months into a 10-year plan.
New UK data meantime showed mortgage approvals hitting a 10-month high in May, with the Pound rising sharply on the FX market, squashing the gold price for Sterling investors near fresh 7-month lows beneath £744 per ounce.
