With Greek debt and aid talks back on the horizon, gold dropped a bit yesterday, with bullion trading in a $7 range coming right after a Friday rally.
The U.S. Thanksgiving holiday having ended, external market fluctuations seem to have stabilized a bit as investors get back into the thick of things.
If the IMF and the Eurozone do not come to an agreement over how to aid Greece, gold could bounce back up—playing its safe-bet role once again.
“Most of the activity came from CTAs (Commodity Trading Advisors) and hedge funds who were either adding to longs or reversing their shorts. It seems that the expectations for the Fed’s planned actions are stronger now than they had been before the election,” said Carlos Perez-Santalla, a broker at PVM Futures.
The Fed had stated back in September that it would continue providing stimulus injections until employment numbers showed a distinct uptick. Gold has since settled down a bit on the heels of that news.
Spot gold rested at $1,749.14 at 2:49PM yesterday (down 0.2 percent). COMEX gold futures for December dropped to $1,749.60 (down $1.80/oz), while trading volume was at around 20 percent over the 250-day average.
The recent return to uncertainty over Greece had wider effects too, as the S&P 500 and crude oil both dropped.
News from the European side indicates that a write-down of Greek debt is not an option at the moment, meaning much rests on the outcome of IMF/Eurozone finance ministers’ deliberations over how to confront the Greek problem.