Gold has officially erased any gains it has earned in 2012 based on the current financial situation in Europe. The eurozone debt crisis has been affecting the global market over the past week with Europe’s political uproar and an unknown economic outlook. “Worries about Europe are pushing people to the dollar,” Frank McGhee, at Integrated Brokerage Services LLC.
The Greek election has frightened many that the nation may exit the eurozone, which in turn would create a catastrophe for the financial market. “I think for as long as the crisis in Europe drags on, it’s going to keep sentiment broadly in check. At the moment, gold has been painted with the risk brush. It’s going to be very much a tracker of the equity markets,” said Nick Trevethan, a senior commodity strategist at ANZ in Singapore. Economists at Citi have predicted the chances of Greece leaving the euro to be between 50 and 75 percent. Billionaire investor, George Soros said,” The euro is seriously at risk. The consequences of a non-controlled implosion risks to be disastrous.”
Oil prices have continued to drop to its lowest level in almost five months due to Europe’s fiscal crisis along with Saudi Arabia’s oil minister who made it clear that prices could decline even more. “Greece is unable to form a coalition government and Europe is the biggest problem right now,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. “When the Saudis speak, the market tends to listen. They’ve been trying to talk down the market for a while.”
At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold – $1557.80 – Down $27.70.
- Silver – $28.19 – Down $0.78.
- Platinum – $1439.10 – Down $33.30.
- Palladium – $591.00 – Down $13.30.