26-Sep (USAGOLD) – Gold extended lower in overseas trading, touching levels not seen since early-July, as global deleveraging continued. The important 200-day moving average (1529.00) successfully contained the downside, and the yellow metal subsequently rebounded more than $100. More recently, a consolidative intraday tone has emerged around the $1600 level.

There was apparently some progress on Greece at the weekend IMF meeting. Seems like we’ve heard that before. Nonetheless, Greece is now racing to secure the necessary Parliamentary approval of further austerity measures. Seems like we’ve heard that before too. That vote is likely to occur tomorrow. More strikes and protests are already queued up for the coming weeks.

The troika is expected to return to Greece this week to resume their fiscal audit. Even with assurances of further austerity, it seems that providing the next tranche of bailout funds has little real hope of a preventing a default. It is this expectation of default, and expected haircuts for Greek bondholders that has been a major contributing factor to the broad deleveraging sell-off across a wide swath of asset classes.