Germany is strongly considering not providing Greece with further bailout funds

Although the gold price posted it second weekly loss in three, a rather encouraging sign emerged in the precious metals space. Gold equities not only climbed to a new record high alongside the price of gold, but as a group they continued their recent trend of outperforming the yellow metal. The Market Vectors Gold Miners ETF (GDX) reached a new high of $66.98 per share on Friday, and posted a 1.4% weekly gain. Furthermore, the GDX is now higher by 4.9% this month.

The euro zone sovereign debt crisis continued to be at the forefront of economic concerns last week.

Rumors of a Greek default escalated on Friday after a report that German Chancellor Angela Merkel’s government is “preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults,” according to three coalition officials.

Confidence in policymakers’ ability to contain the crisis was dealt another blow on Friday when European Executive Board Member Juergen Stark unexpectedly resigned due to “personal reasons.” Stark was widely thought to have been opposed to the resumption of bond purchases, according to Reuters, which cited two sources that spoke on condition of anonymity. Carsten Brzeski, ING Bank’s senior economist, wrote in a note to clients that Stark’s resignation may increase the likelihood of further monetary policy easing by the European Central Bank (ECB).

The gold price fell $14.27 to $1,818.70 Tuesday morning as sovereign debt concerns in Europe led to broad-based liquidation in financial markets.