Gold gives up gains as Greece contemplates sailing away

In The Lead: “Sail Away”

Another day of substantial selling in the precious metals complex brought gold prices right back to the $1,550 value zone, raising legitimate questions about whether the numerous calls of a bottom occurring last week were perhaps premature considering the unresolved situation over in Europe. Albeit gold managed a relatively swift climb from last Wednesday’s $1,526 low to $1,600 on Monday, the pullback on Tuesday as well as overnight took shape with an equal amount of speed and (this time) selling energy.

Tuesday evening’s closing spot bids showed  gold down by $24 at $1,568 per ounce, silver off by 24 cents to $28.20, platinum losing $23 to $1,441 the ounce, and palladium declining by the smallest amount on the session; $1 an ounce to $609. The evening hours witnessed additional declines in the metals. Gold fell further and reached lows near $1,554 while silver fell decisively under the $27 mark per ounce ($27.68). Platinum shed another $10 (at $1,431) while palladium dropped $2 to $607 the ounce.

The midweek session in New York opened with losses on the board once again. Gold slipped $11 to $1,558 silver declined 51 cents to $27.69 per ounce, platinum shed $17 to $1,425 and palladium fell $5 to $604 the ounce. Standard Bank (SA) reports that “PGMs continues to follow the broader downward trend of the rest of the complex despite supply issues remaining. The union-related work stoppage at Implats continues, and Northam announced a suspension of work at one of its Zondereinde shafts due to an accident, which resulted in a fatality (the company’s refinery operations have also been closed for two weeks after a burn out occurred) — and a fire has occurred at the jointly owned (Implats and Aquarius) Mimosa mine in Zimbabwe (details are not yet available on the damage and production losses).

At this juncture, the precious metals have all but erased the hard-fought gains they managed to put on the price boards in the final two sessions of last week. Albeit the US dollar was a tad lower (-0.04%) it was still above 81.70 in the index and the euro was still sweating crisis bullets with a quote near a fresh low of $1.265 (a 21-month nadir) against it. Wall Street was prepping for a down day while crude oil was already struggling with one; it was hovering near $91 a barrel, down another 0.75 percent.

While base metals lost very little in Tuesday’s sell-off, crude oil fell by almost 1% to $91.44 as speculators began to…speculate about where demand for the commodity might come from in the event Europe and/or China encounters a difficult economic period ahead. Speaking of difficulties, the latest report from Credit Suisse on China is going to be somewhat alarming to the camp that still believes that the country is going to remain in an “insatiable for commodities” mode going forward. Far from it, it would appear.

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