Friday morning saw the dollar gold price trade in a three dollar range, around $1,526, in London. At the same time, stocks and commodities were up, as was the euro despite investors speculating about a potential halt to IMF’s latest payment of the €110 billion bailout granted to Greece.
At lunchtime Friday gold seemed to heading for a 1% gain this week.
However, as argued by Heraues, a German precious metals trading group, in its latest weekly report: “The gold price is presently in no-mans-land.”
They added: “Further developments in price [of gold] will depend on how things evolve on the sovereign debt crisis… should things not ease, then gold should remain expensive.”
MKS, a Swiss precious metals group, said “we wouldn’t rule out a small correction due to investors booking their profits.”
Meanwhile, the euro rallied on Friday, despite the likelihood that the IMF will withhold its next Greek bailout payment, as a result of Greece being unable to guarantee its solvency.
Jean-Claude Juncker, Luxembourg Prime Minister and chairman of the Eurozone finance ministers, said “There are specific IMF rules and one of those rules says that IMF can only take action when the refinancing guarantee is given over 12 months.”
Former chief economist at the European Central Bank, Otmar Issing, told reporters on Thursday: “I was among many economists in Germany warning against premature entry into the monetary union and against too many countries,” adding that “Greece cheated to get in [the Euro].”
German newspaper Der Spiegel last year published a report stating that Greece used “creative accounting” to “mask the true extent of its deficit.”
A Hong Kong dealer said that the overall sentiment for the price of gold is “still bullish” as a result of what is happening in Greece.