Spot gold prices are trading modestly lower Monday as risks of an immediate Greece exit from the eurozone subsided after Sunday’s elections saw the nation’s pro-bailout parties winning by a slim margin. Spot gold prices initially sank to session lows of $1606.49 a troy ounce early on in the Asian session, before prices recovered to meet resistance around session highs of $1629.5. Sentiment in gold remains mixed with flows subject to two-way trade. This morning’s early move lower was contributed to some moderate haven buyers, seen last week, exiting the market early expecting a possible stronger risk-on reaction in Asia. Although the risk theme has developed moderately, an air of caution remains with investors worried about the risk rally being short lived and some returning fear of higher borrowing costs for other components of the eurozone, such as Spain and Italy. Spot gold also continues to attract speculative longs hoping for some hints of another round of quantitative easing (QE) when the Federal Open Market Committee (FOMC) releases a policy statement on Wednesday. Spot gold last $1622.5.
EasyForexNews Research Team