The Daily Market Report: Gold Consolidates, Underpinned by Concerns Over Greece

08-Jun (USAGOLD) — Gold is consolidating in the upper half of Friday’s range. This leaves the yellow metal well within the broader 1131.15/1307.59 that has dominated so far this year.

The yellow metal came under pressure following Friday’s better than expected jobs report for May, amid speculation that ongoing jobs growth would invent the Fed to raise rates in September. However, NY Fed President William Dudley was quick to quash the optimism, worrying that the recent jobs gains were primarily the result of losses in productivity. Dudley also expressed concerns that economic growth was insufficient to sustain the jobs gains.

Greece was at the top of the agenda at the G7 meeting in Germany. Host Angela Merkel said the G-7 was all for Greece staying in the eurozone, but if the country “makes proposals and implements reforms.” That’s something they are seemingly loth to do, with most of what would be considered meaningful reforms being classified as non-negotiable “red line” items.

Greece missed a payment to the IMF on Friday, exercising a rarely used option to bundle all the payments due in June into a single payment due at the end of the month. Everyone acknowledges that this was a gambit to buy some more time, as it is extremely unlikely that Greece will be able to make the €1.6 bln payment on June 30.

Uncertainty about how the Greece crisis will play out over the next three-weeks is likely to limit gold’s downside. As the latest in the long series of deadlines gets closer, more investors may seek the safety of gold.