Wednesday, 08 July 2015 17:04
,000/oz on China worries” alt=”Gold at 4-month lows, platinum nears ,000/oz on China worries” width=”278″ height=”181″ src=”https://globalrubbermarkets.com/wp-content/uploads/2021/09/gold-falls-1-pct-as-dollar-rises-on-fed-rate-hike-expectations.jpg”>LONDON: Gold extended losses to touch its lowest since March on Wednesday as markets nervously watched the tumble in Chinese stock markets and the unfolding Greek debt crisis.
Other precious metals took cues from gold, logging sharp losses, with platinum approaching the $ 1,000 an ounce mark for the first time in more than six years.
Global financial markets have been rattled by the Greek crisis that could see Athens leave the euro zone. Adding to those jitters were concerns about Chinese growth and uncertainties related to the equity market correction.
“We saw a broad-based sell-off in metals – copper, iron ore, precious – and that is more closely related to China than Greece, with the suspension of equity trading on the Chinese stock exchange raising questions about the economy there,” Julius Baer analyst Carsten Menke said.
“The only way Greece is influencing precious metals is through the currency, as we saw the dollar strength early in the week.”
Gold, usually seen as an alternative investment in times of financial and economic uncertainty, has failed to see significant retail buying from either of those factors, due to a generally robust dollar and prospects of higher US interest rates. These would increase the opportunity cost of holding gold.
Traders will monitor the minutes of the Federal Reserve’s June policy meet to be released on Wednesday, for clues on when the U.S central bank would begin to increase rates.
Safe-haven buying seems to have by-passed gold in favour of US Treasuries and other sovereign debt, HSBC said in a note. Spot gold was down 0.1 percent at $ 1,154.55 an ounce as of 1001 GMT, just above an earlier lowest since March 18 at $ 1,146.75. It fell more than 1 percent on Tuesday.
The dollar was down 0.4 percent against a basket of leading currencies, but was still near a one-month high, while European shares rose.
In recent weeks, the US currency has been boosted by weakness in the euro as uncertainty persisted over Greece’s fate in the euro zone.
Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe’s currency bloc and into economic ruin.
Silver was down 0.4 percent at $ 14.96, adding to a 4.4 percent tumble in the previous session, when it touched its lowest since December 2014. Palladium fell 3 percent to mid-2013 lows of $ 627.72 an ounce.
