Greek bailout deal drops gold price through $1,200
Equity markets welcomed the news of an agreement on the extension of Greece’s €172bn ($195bn) bailout on Friday, but gold traders pushed the gold price below $1,200 for on the second day since the beginning of the year.
In thin Friday afternoon trade on the Comex division of the New York Mercantile Exchange, gold futures for April delivery – the most active contract – slid to a low of $1,198.56 an ounce, down $7 or 0.6% from Thursday's close.
The common communique was produced after nearly five hours of talks between Dutch finance minister Jeroen Dijsselbloem, Wolfgang Schäuble, his German counterpart and Yanis Varoufakis, the Greek finance minister. It now has to be approved by all 19 finance ministers of the eurozone.
While Friday's deal ensures Athens avoids bankruptcy, details of the reforms and austerity measures the European nation has to implement have not been set out. The agreement simply kicks the can down the road and sets up another potential stand-off in June when a $4bn debt payment comes due.
Gold is now trading more than $100 below its 2015 high hit January 22 a rally that came on the back of another European currency shock – the Swiss dropping the franc's euro peg.