"Tremendous Misunderstanding" of The Greek Situation: CPM GroupDaniela Cambone
Monday June 22, 2015 13:33
(Kitco News) - Gold prices are under selling pressure late Monday, and have extended moderate early losses to trade sharply lower on the day.
With the European Union and Greece talks looking hopeful for a debt restructuring deal, it has pressured safe haven gold. August Comex gold futures are retreating from a brief push above $1,200 an ounce.
"I think there is a tremendous misunderstanding of the Greek situation in the financial market and people are pretending or acting that it is much more important than it is," said Jeffrey Christian, director for CPM Group, a New-York based commodities research firm.
"At some point it will be resolved and it will be resolved in a mutually dissatisfactory way, that is the way debt restructuring talks work out," he explained.
Christian stressed that he does not think that Greece will provide an opportunity for gold, and neither will other current global economic and political problems. "[N}one seem to be so compelling or likely to tip over in bad territory," he said.
Gold has been trading between $1,150 and $1,220 since February and will most likely stay in this range for the next couple of months, Christian said.
"When Greece reaches a resolution maybe later this week or in the next few weeks, I think you could see some downward pressure on gold - it may stop at $1,180," he adds.
European officials were cautious about the prospects of reaching an agreement during an emergency summit held Monday in Brussels. Adding to the cautiousness, German Chancellor Angela Merkel, warned against expecting too much.
Ahead of the meeting, Greek Prime Minister Alexis Tsipras set out new proposals to try and prevent a default on a $1.8 billion loan. Another set of meetings is scheduled for Thursday and Friday.