Spot gold prices have dropped to their lowest level seen in over four and a half months Wednesday, pressured by a weaker EUR as investors became nervous about the political upheavals in Greece that threaten to sink the country into chaos. Spot gold traded down to $1587.5 this morning, extending its 2% slide from yesterday’s session. Prices are currently trading $1593, down $12.50 from yesterday’s close. Nervous investors have continued to express a preference for other haven assets such as the USD and German Bunds, whilst gold remains more correlated towards movements in the euro and other risk assets. Senior metals strategist Nick Trevethan at ANZ in Singapore summed it up perfectly saying “The situation in Europe is difficult, but what’s happening is that everything tainted with risk is being sold, even though the real risk associated with that product is less than one could justify by its price movements”. The next level of support for gold is around $1580 after prices yesterday finally broke $1625 and $1620. Dealers reported a pickup in physical buying in the Asian market.
EasyForexNews Research Team