Gold starts week on a high note

February 10, 2015 11:03 AM

Gold prices rose on Monday to begin the new trading week. The yellow metal caught a bid today as stocks came under pressure and a general sense of risk aversion entered the markets.

The ongoing situation in Greece may remain a source of investor angst until more clarity is seen. The anti-austerity Syriza party has begun rolling back austerity measures, and its leadership has also stated that they will move forward with raising the minimum wage and hiring more public workers.

The European Central Bank has said that it will not extend credit on Greek bonds or guarantees by the Greek government. The Greek Prime Minister has said that rather than seeking an extension of the current bailout program, his government will look for a bridge loan to enable the country to service its debt.

Eurppean Union finance ministers will be meeting this Wednesday to discuss the situation, and it would appear that some rocky times could potentially be ahead. The notion of a Greek exit from the EU may lend gold some support as no one knows just how this could potentially play out or affect financial markets.

The gold bulls will likely be watching stocks very closely here. The stock market has been on the rise once again, and is within striking distance of the recent highs. The market has shown some potential signs of topping action, however, and should stocks begin to fall once again gold may potentially benefit.

Markets are still considering last week's non-farm payrolls data as well, and it would seem that the Fed may begin raising interest rates at their June meeting. The notion of higher rates may weigh on gold, however, it also seems likely that the initial hike has been discounted by the market already.

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