Global risk assets traded under fresh pressure at the start of the week as diverging sentiment in Asia, Europe and the US saw mixed trading throughout the day. UK markets gave back some of Friday’s heady gains as the city faced up to the prospect of an EU referendum while eurozone stocks were also trading in the red after attention switched back to Athens.
The euro drifted lower for the third straight session as crunch time for negotiations between Greece and its creditors is fast approaching. The Greek government are scheduled to repay €750m to the IMF tomorrow and with eurozone finance ministers meeting today many market participants hope a deal can be reached. After trading towards a fresh two month high on Thursday last week towards 1.1392 against the dollar the euro has slipped gradually lower with today’s activity pushing the single currency towards 1.1133.
Spot gold prices lifted for the second day as renewed jitters saw investment demand for the perceived safe haven asset improve. The yellow metal built on support at Friday’s close and traded towards $1,190/oz towards the end of the European session despite intraday moves seeing prices dip below $1,185/oz and rally towards $1,192/oz. Appetite for the precious metal remains solid as prices test resistance at the 50 day MA despite recent dollar strength as the greenback rallies for the third straight session against a basket of major currencies, back above 95.00. For now, ongoing Greek debt concerns will underpin support for gold with the potential for prices to revisit $1,200/oz in the near term on any further delays to a deal.