Although gold price seemed to have found temporary support around 1075, the benchmark contract slid -0.5% last week following a -3.6% decline in the prior week. Strength in USD and shift of demand to PGMs weighed on the yellow metal. In the near term, gold should remain under pressure as the dollar will probably be boosted higher by sovereign risk problems in Greece. In fact, investors are very much concern about the Greek fiscal problem will be spread to other European nations.
Greek bonds and CDS showed that investors are increasing worried that the EU will not assist the nation to come out of debts. The euro plummeted to as low as 1.3861, the lowest level since July 2009.While we believe the EU and IMF will eventually offer some kinds of financial supports to save Greece from going bankrupt, the problem will remain a drag for the euro, and hence gold.....Read the entire article.
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