Greece to receive the required €130bn in bailout loans

With the US on holiday and the rest of the market holding its breath ahead of the much-anticipated meeting of Eurozone finance ministers last night, yesterday saw gold price trade largely sideways. However, after the conclusion of the meeting, at which agreement was reached for Greece to receive the required €130bn in bailout loans, markets immediately reacted positively. Most of the pick-up in gold price was owed to a weaker dollar.

However, enthusiasm has faded this morning, as the euro loses ground. Most gold price are trading at the levels before the conclusion of last night’s meeting. Perhaps confidence has been dented by a leaked confidential report, currently doing the rounds, that warns that Greece could require even more debt relief. In addition, uncertainty over the public backlash and the upcoming Greek elections (in April) has also perhaps dampened confidence in the deal.

For the rest of today, we might see some support for prices as the US plays catch up to the overnight Eurozone news. However, should the current questioning of the situation in Greece gain traction (which Eurozone equities, currently in the red, seem to indicate) we could see precious metals remain on the backfoot due to the stronger dollar.

Gold support is at $1,730 and $1,723. Resistance is $1,742 and $1,745.