Gold Dips Despite Greek Debt Crisis and China Stocks Slump

07-Jul (Wall Street Journal) — Gold prices were lower on Tuesday, as concerns about Greece’s potential exit from the eurozone as well as the slump in Chinese equities failed to have much impact on the traditional safe-haven asset.

“Gold has surprisingly not reacted to the events, but that could change as worst-case scenarios crystalize,” said Nitesh Shah, associate director of research at ETF Securities.

Spot gold was down 0.7% at $1,164.80 a troy ounce in European trading.

Attention in the gold market remains largely focused on developments in Greece’s debt crisis, as Prime Minister Alexis Tsipras is set to meet with other European leaders in an effort to find a solution. Banks remain closed, while the Athens stock exchange is expected to be closed on Tuesday and Wednesday.

[source]

PG View: I’m skeptical rate hike expectations are outweighing Greece and China concerns. Zerohedge suggests that mounting margin calls in other markets may actually be the primary reason for today’s retreat in gold and silver. You may recall that gold initially sold off in the early stages of the financial crisis as investors liquidated anything and everything (including paper gold) to raise cash to cover margin calls.

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