Greek drama boosts appeal of gold; Greece and creditors have less than 4 hours to reach deal

Gold rose on Thursday, boosted by uncertainties over the future of Greece boosted the safe-haven appeal of the precious metal. Meanwhile, time is running quickly for Greece and its creditors to manage to conclude a deal.

Comex August gold added $3.10, or 0.26%, to trade at $1,176.00 a troy ounce during European morning hours.

Comex July silver lost 1.3 cents, or 0.08%, to trade at $15.84 a troy ounce, while July copper dipped 0.7 cents, or 0.27%, to trade at $2.618 a pound.

Gold was pressured after the news from China. A day earlier, reports said that Chinese consumer demand for gold has shrunk significantly in 2015 (down just under 15% so far in 2015) due to many consumers preferring Chinese stocks over gold as an investment asset.

China gold imports could plunge by 20% by the end of 2015. However, the report also said consumer demand for gold in India is higher this year, due to the easing of gold import restrictions by the Indian government. China and India are neck-and-neck the largest gold importers in the world.

In the meantime, Greece and its creditors failed to achieve agreement on Wednesday. The talks restarted early on Thursday.

The two sides are really struggling to lessen the gap over the measures Greece must take to obtain bailout funds. As it was reported yesterday, the IMF refuses to accept Athens’ plan to raise €8bn mainly through tax rises, and is demanding much tougher pension reforms.

As the Guardian has said, Greece and its creditors now have less than four hours to reach some agreement, before Eurozone finance ministers resume their own meeting.

A senior official of Greece’s ruling Syriza party has suggested that creditors are trying to “blackmail” Athens. Nikos Filis, the ruling Syriza party’s parliamentary spokesman, told Mega TV that:

“The lenders’ demand to bring annihilating measures back to the table shows that the blackmail against Greece is reaching a climax.”

Filis added that Greece is adamant that lenders must embrace the issue of debt relief:

“There cannot be a deal without a substantial reference and specific steps on the issue of debt.”

The Greek stock market has just opened with shares falling fast.

Bank shares have dropped by 5%, helping to drag the main ATG index down by almost 2%.