METALS OUTLOOK: Greece, Dollar To Influence Gold Next Week
(Kitco News) - How the situation in Greece unfolds over the coming days could influence the precious metals market into next week, market participants said Friday.
As Greece teeters on the brink of default and civil unrest rises in the country over sharp spending cuts, gold has seen some safe-haven buying emerge as investors flee riskier assets. Meanwhile, other precious metals with industrial ties such as silver and the platinum group metals have faltered as investors move from risk and from concerns about reduced global growth increase amid disappointing economic data.
August gold futures on the Comex division of the New York Mercantile Exchange settled at $1,539.10 an ounce, up 0.647% on the week and July silver futures settled at $35.748 an ounce, down $1.59% on the week.
In the Kitco News Gold Survey, out of 34 participants, 22 responded this week. Of those 22 participants, 15 see prices up, while four see prices down and three see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
Traders said along with gold, other beneficiaries of safe-haven buying are the U.S. dollar and the Swiss franc.
There is some debate about how much strength gold might garner from safe-haven buying when the dollar rises. Because gold is dollar-denominated, the two markets often move in opposite directions. But for those who view gold as an alternative to fiat currency, the recent rise in the dollar has little impact on gold’s overall story.
A few market participants are beginning to take a more nuanced view on gold’s strength when it comes to currencies. While gold may have meandered as valued in dollars, several participants point to the strength the yellow metal has in euro and sterling terms.
Many of them may see flat gold prices in dollar terms, but would be buyers of gold in euro terms as the outlook for gold as valued in that currency is stronger.
Gold was hampered on Friday when the dollar rallied. The metal moved off of its lows when the dollar came off of its highs, traders said, after hopes emerged that a deal might be struck to help Greece deal with its yawning debt problem.
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