Gold Softer Even As Ukraine Situation Heats Up

Gold prices are modestly lower in early U.S. futures trading Wednesday, as follow-through technical selling is featured. The key “outside markets” are also in a bearish posture for the precious metals on this day—a firmer U.S. dollar index and lower crude oil prices. Gold prices dipped to a six-week-low overnight. April Comex gold was last down $2.60 at $1,205.80 an ounce. March Comex silver last traded up $0.102 at $16.485 an ounce.

Reports overnight said there has been progress in talks between Greece and the European Union regarding Greece wanting to roll back some of its austerity measures. The reports said the present bailout plan would be extended for six months—meaning Greece will receive immediate funds. This news is deemed slightly bearish for the safe-haven gold market. Greece is on the verge of insolvency and needs a fresh infusion of financing fast. In what has become commonplace on EU sovereign debt matters, this latest issue has just seen the can kicked down the road and the problem will surface again. Many traders and investors have become numb to the EU sovereign debt crisis news, which is now several years old.

In a sign of how European investors feel about the prospects of Greece remaining a viable, payment-honoring EU country, German 10-year bonds on Wednesday sold at a record low average yield of 0.37%. Read that as keen safe-haven demand.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza