On Wednesday the gold edged higher during early U.S. trade, as the yellow metal is benefiting from the bond markets as well as uncertainties surrounding Greek negotiations with its creditors.
August Comex gold was last up $11.00 at $1,188.80 an ounce. July Comex silver was last up $0.173 at $16.135 an ounce.
Investors will now wait for fresh economic data which in the U.S. includes the weekly MBA mortgage applications survey, the monthly Treasury budget statement, and the weekly DOE liquid energy stocks report.
Today gold was higher underpinned by U.S. and German government bond markets which are being pressured Wednesday. A couple of months ago the German
10-year bund yield was just 0.05%, while today it saw a rise above
1.0%.
September U.S. Treasury bond futures prices hit a new contract
low Wednesday morning. The bond market turmoil is being partly caused by the view that inflation is coming back to Europe and due to warnings from the European Central Bank that bond market volatility could be normal.
Investors closely watch the long lasting talks between Greece and its creditors which to date have not brought any deal on restructuring Greece's sovereign debt.
On Tuesday Greece submitted the fresh list of reforms to its
EU-IMF creditors, detailing how it plans to cover its funding gap. However, troika officials
rejected it. Greece appears to be dragging
its feet on meaningful reforms as the nation is running out of cash.
While this standoff is blamed for the European bond market turmoil, it prompted some safe-haven demand for gold.
In Asia, China’s central bank lowered its
economic growth forecast to 7.0% in 2015, which is slightly less than
its last estimate, but still a bulky figure by world standards.
Economists at the central bank also forecast annual inflation of just 1.4 percent in 2015, lowering their estimate from 2.2 percent earlier.
They specified that easier monetary policy conditions as a result of China cutting interest rates three times since November were expected to support growth in coming months.
