The Greek parliament has approved the bailout package and the market has accepted it with a strong corrective rally in the equities indices after yesterday afternoon featured some protective selling near the close.
The U.S. Comex gold futures fell 0.48% last week and dropped a further 0.38% this week to $1,153.50 on Tuesday. The implied volatility of the gold futures has been falling from 21% in January to 11.5% currently in line with the decline in prices.
The markets generally have continued to stabilize after the Greeks appear to have backtracked in their willingness to accept certain austerity measures as a condition of further financial assistance and the measures that the Chinese government instituted to bolster her failing equity markets appear to have worked for the moment.
Gold is flat today and appears to be consolidating on yesterday’s gains. Conflict in the Middle East and Moody’s downgrade of France’s AAA rating will support gold. Indeed, the Moody’s downgrade of France shows how the global debt crisis is spreading.
Gold prices hovered just below $1,738 an ounce Monday morning in London, close to three-week highs, while stocks and commodities were broadly flat and the euro traded near two-month lows against the dollar.
US dollar gold prices held above $1,580 an ounce Monday morning in London – broadly in line with last week's close – while major European stock markets were broadly flat on the day, with the exception of Spain's Ibex.
Spot precious metals dealings opened on the weak side with all four principal metals that we track losing more than 1.2% and up to 2.1% percent. Spot gold was down nearly $25 at $1,704 per ounce while silver was bid near $33.25, down 60 more than cents.
Gold bullion prices held steady just below $1,750 per ounce Wednesday morning – 2.2% up on yesterday's low – after rallying the previous day following comments from US Federal Reserve chairman Ben Bernanke.
Gold prices fell to a 2-week low of $1,711 per ounce Tuesday lunchtime in London, with stocks, industrial commodities and the Euro also trading lower amid uncertainty over whether Greece is headed for default.