Gold rate struggles near four-month lows on robust US dollar

By: | Published: July 8, 2015 9:11 AM

Gold rate languished near its lowest level since March on Wednesday as the ongoing Greek debt crisis boosted the dollar, offsetting any safe-haven demand from uncertainty in the euro zone, with other precious metals also taking a tumble.

Gold rate languished near its lowest level since March on Wednesday as the ongoing Greek debt crisis boosted the dollar, offsetting any safe-haven demand from uncertainty in the euro zone, with other precious metals also taking a tumble.

FUNDAMENTALS

* Spot gold was little changed at $1,155.69 an ounce by 0053 GMT, after dropping about 1 percent in the previous session. The metal fell to $1,148.05 at one point on Tuesday, its lowest since March 18.

* Silver dropped 4 percent overnight in its biggest daily drop since January and taking the metal to levels last seen in December 2014.

* Platinum tumbled to its lowest since 2009, while palladium fell to 2013 lows.

* The precious metals took a hit as the dollar climbed to a one-month high against a basket of major currencies on Tuesday. A stronger greenback makes the dollar-denominated metals more expensive for holders of other currencies.

* The dollar has been supported by weakness in the euro as uncertainty persisted over Greece’s fate in the euro zone after it defaulted on a payment to the International Monetary Fund.

* Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe’s currency bloc and into economic ruin.

* At an emergency summit in Brussels on Tuesday, representatives of the 19-country euro zone said all 28 European Union leaders would meet on Sunday to decide Greece’s fate. The talks were organised after Greeks voted last Sunday against a bailout that carried stringent austerity measures.

* Gold, usually seen as an alternative investment in times of financial and economic uncertainty, has failed to see significant safe-haven buying due to the Greek crisis as fears of contagion seem to be limited.

* Elsewhere, the U.S. Mint said on Tuesday that it temporarily sold out of its popular 2015 American Eagle silver bullion coins due to a “significant” increase in demand, the latest sign plunging prices have spurred a resurgence of retail buying.

* South African gold producers said on Tuesday that union wage demands were “unaffordable” and could add 16.5 billion rand ($1.3 billion) to the sector’s wage bill.

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