Gold News

Greek Vote "Very Important" to Gold Price

The Gold Price is currently on hold, according to market analysts, waiting for the results of the Greek legislative elections this coming weekend.

After May 2012's failure to elect a majority government, latest opinion polls  – conducted in "secret" due to laws banning such news within two weeks of an election – suggest that "a pro-European government which will push ahead with reforms will be formed on Sunday," says Panagiotis Kladis at NBG Securities in Athens, speaking to Reuters.
"It is very difficult to do anything, when we have the huge uncertainties of Greek election on weekend as well as the [US Federal Reserve] meeting next week," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong.

"The result of the vote will be very important not just to gold but across the whole financial markets next week," says RBS precious-metals analyst Nikos Kavalis in London.

"If we get a disappointment, we can expect a massive sell-off across the board.

Should Greece avoid a repeat of its failure to form a government in May, the Gold Price could continue its recent rally, says Kavalis. But "If we get a good result we won't necessarily have a massive rally [in the Gold Price ], simply because people aren't necessarily convinced that even if we have a pro-austerity coalition, we are in any way out of the woods."

The Gold Price ended May with its fourth monthly loss in succession against the US Dollar, the first such run since 1999.

Greek polling stations will close around 8pm Sunday (6pm London time, 1pm in New York), with early results due from 9:30pm and the first real indications of a result likely towards midnight.

Alexis Tsipras, leader of left-wing party Syriza, said earlier this week he wanted to cancel the latest bail-out, but stay within the Euro currency zone.

New Democracy, the main conservative party, says Syriza's plans would "turn Greece into a wasteland."

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Pol Molinas is working as a research assistant at BullionVault, the No.1 gold and silver ownership service for private investors.

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