Gold eases on Italy, Greece debt worries

Gold eases on Italy, Greece debt worries

Gold fell almost 2 percent on Thursday as worries about a disordered bankruptcy in Greece and a deepening debt crisis in Italy weighed on market sentiment and pushed investors to liquidate commodity assets, including precious metals.

“Broader trading is jittery but gold is more supported,” said analyst Andrey Kryuchenkov of VTB Capital.

“If the dollar weakens and the broader market is more risk-friendly gold will track it. If uncertainty remains, gold will be supported by safe haven buying.”

Looking at what is going on in Europe a further round of liquidation across commodities, including gold, is possible,” said Credit Suisse analyst Tom Kendall.

“It’s not the fact that people are staying away from gold as a safe haven asset but short-term players sell across market classes when they see the market shifting.”

“Physical gold demand is strong in some parts of Europe,” Kendall said.

“Other precious metals such as platinum and palladium however are suffering with what is going on in the auto sector; floods in Thailand have caused serious disruptions in Asia. There is no real sense that we’ll have a turning point for PGMs (platinum group metals) for the moment.”

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