Gold Falls as Haven Demand Squelched by Greek Plans

WSJ ^ | Updated Feb. 3, 2015 | Ira Iosebashvili

[SunkenCiv]

Gold prices fell Tuesday, as hopes for an imminent resolution between the new Greek government and its creditors tempered demand for the safe-haven metal.

Gold for April delivery, the most actively traded contract, closed down $16.60, or 1.3%, at $1,260.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

A Greek official said Tuesday that Athens was working on a "road plan" to lessen the burden of his country's hefty debt pile, and he hoped to have an agreement with Greece's creditors by the beginning of June. The comments led some traders to sell gold, which had seen demand amid worries that Greece's new antiausterity government would clash with officials from other European countries, raising political uncertainty in the region.

A sharp rise in oil prices and stock markets also helped soothe worries about the global economy and sapped interest in gold, investors said. Global oil prices were recently up 7.2% at $58.68 a barrel, while the Dow Jones Industrial Average was up 1.6% at 17,640.95.

"Gold just doesn't look very good as an alternative asset right now," said Bill O'Neill , a broker at Logic Advisors. "The gold market needs a steady stream of bad economic news if it's going to stay up."

Investors had been buying gold in recent sessions after crude-oil prices tumbled and spurred concerns about how lower energy costs would affect global markets. Some traders view gold as a haven from political and economic turbulence, believing it will keep its value better than other assets. Expectations of higher interest rates in the U.S. this year have weighed on prices for the precious metal, which has a hard time competing with yield-bearing assets when monetary policy tightens.

[SunkenCiv]

subtitle, "Higher Oil Prices, Stocks Also Soothed Worries About the Global Economy, Hurting Gold ".

[Nervous Tick]

>> Some traders view gold as a haven from political and economic turbulence, believing it will keep its value better than other assets.

Arguably true. Unless it’s in a frothy bubbly state itself.

Which it is.

[ozzymandus]

“Buy low, sell high”. Trouble is, how do you know when “Low” and “High” are? The “experts” are wrong as much as they’re right.

[SunkenCiv]

• Obama Expresses Sympathy for New Greek Government ["You Cannot Keep On Squeezing Countries"] [2015]
• Europe's creditors play with 'political fire' in pushing Greece to the brink [2015]
• Eurozone alarm grows over Greek bailout brinkmanship [2015]
• Greece says will not cooperate with troika or seek aid extension [2015]
• The moochers won in Greece [2015]
• Germany's top institutes push 'Grexit' plans as showdown escalates [2015]
• Lack Of Reform, Not Austerity, Doomed Greek Economy [2015]
• Germany - no debt haircut for Greece but bailout extension an option [2015]
• Greece's radical new leader declares war on country's all-inclusive resorts visited [2015]
• Syriza Trounces New Democracy; Greeks Stop Paying Taxes; Run on Greek Banks Escalates; Get Out! [2015]
• Mass Delusion among Greece's Far Left: Victorious Syriza wants Greece to skip out on its debts. [2015]
• European Socialists, Radical Muslims United by 'Mutual Hatred for Judeo-Christian Culture' [2015]
• Switzerland and Syriza [2015]
• Add this to Greece's list of problems: It's an emerging hub for terrorists [2015]
• Anti-Semitic Politician Becomes Greek Defense Minister [2015]
• Russia would consider aid to Greece if asked: Siluanov [2015]
• Greece's Syriza Party: We're Not on Board with Sanctions on Russia [2015]
• Greece says No to EU statement on Russia [2015]

[SunkenCiv]

Investors take risks, if they’re plunging into gold (which is well off its highs I believe) they must be highly motivated. :’)