Gold showed poor performance on Tuesday, falling with a stronger US dollar, while Greek crisis seems not to hurt markets in such a large scale, as most of its losses have already been priced-in before.
Nevertheless, we can expect some higher volatility after the end of June, when the International Monetary Fund (IMF) will initiate second stage of process with indebted country. We mentioned the entire process (which could even last for approximately two years) in shorter version in this article. Now Greece has still two weeks to find the appropriate way how to provide €1.6 billion euro to the IMF.
But this week’s key issue for dollar-backed commodities (and gold naturally as well) is the Federal Open market Committee (FOMC) statement with economy projections and subsequent speech of Federal Reserve’s Chair Janet Yellen.
Although the two-day meeting started already today, we can expect an outcome tomorrow only, focusing mostly on the hot topic of first rate-hike hints. As June got out of the game, September remains the major bet for traders, albeit large group still believes more in December or even beginning of 2016.
Nevertheless, dollar remains strong against most of its major counterparts and commodities, getting closer to the decision of monetary policy tightening and gold sufferred on Tuesday on greenback’s bullish pressure.
The most popular gold exchange-traded fund SPDR Gold Trust confirmed this trend, losing 0.3% to actual 701.9 tonnes on Monday, the lowest level since 2008 and expected to drop even more due to Tuesday preference of traders.
Silver followed the trend of gold dropping below $1,180 an ounce and traded below the $16 level. Platinum traded just a dollar from its six-year’s low at the time of writing, dragged down by strong dollar.
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