On Monday gold prices edged higher as uncertainties over the Greek crisis lent support to the metal.
Investors were looking ahead to the FOMC meeting due on Wednesday.
The gold market managed to close in a positive territory on Friday after three weeks of losses. Silver was not that lucky dipping 1 percent on the week.
On Monday August gold touched a high of 1,183.90 before declining to 1,177.30.
July silver was higher in Monday gaining 0.18% to trade at $15.858.
As Kitco News projects, confidence among investors is not high that the yellow metal will be able to generate solid momentum this week as analysts expect the market to be caught between an uncertain geopolitical outlook in Europe and expectations that the Federal Reserve will confirm expectations for an interest rate liftoff in September.
Gold’s inability to pass though the key psychological level of
$1,200 an ounce has made most gold investors bearish.
According to Kitco News’ Wall Street vs Main Street Weekly Gold Survey,
investors and market professionals are decisively pessimistic.
This week's biggest impact on the gold market will come from the Federal Open Market Committee (FOMC) which will hold a meeting on Wednesday. Investors and economists will anticipate the central bank’s monetary policy statement and will also scrutinize the committee’s economic forecasts, interest rate – also known as the dot plot – projections, and listen to Fed Chair Yellen’s comments during her press conference.
Meanwhile, the Fed is not expected to reveal any major changes with regard to the economic outlook.
However, uncertainties over the Greek negotiations with creditors are seen buoyant for gold.
Negotiations between Greece and its European creditors paused over
the weekend with no further talks expected before a meeting of eurozone
finance ministers on Thursday. The two sides have little time to
conclude a deal before a deadline for eurozone payment of 245 billion of
euros on June 30, as well as the payment to the International Monetary
Fund due the same day.
On Sunday Greek Deputy Prime Minister Yannis Dragasakis said in a statement that the country's delegation remains ready to resume talks but blamed European lenders for insisting on pension cuts and value-added-tax hikes to close the projected budget gap.
Bernard Dahdah, precious metals analyst at Natixis considers that uncertainty in Greece could increase physical demand in gold but only within the country. There is fresh optimism among investors that Europe could survive if Greece does separate; however within the country, nationals could buy gold to protect their capital, the analyst says.
