Gold Price Edges Up as Greece Votes "No"

After Greece missed a 1.55-billion-euro payment to the International Monetary Fund last week, Greek voters have voted ‘no’ in a much anticipated referendum on terms of the latest bailout agreement for the country.
61 percent of Greeks rejected the deal, according to Reuters. The bailout terms would have brought more austerity measures to the country’s economy.
Gold prices rose during Monday trading hours in London, gaining 0.3 percent to reach $1,170.61 per ounce. Usually seen as a safe haven investment, gold hadn’t rallied as much as expected prior to the ‘no’ vote, as a strong US dollar countered uncertainty over the situation in Greece.
Moving forward, Greece will still need to find a way to secure more funding or risk a bank collapse. Results of the referendum have renewed speculation that Greece may have to leave the Eurozone.
Eurozone heads of state will meet on Tuesday to discuss the issue, the BBC reports.
“As of tomorrow, Greece will go back to the negotiating table and our primary priority is to reinstate the financial stability of the country,” said Greek Prime Minister Alexis Tsipras in a televised address. “This time, the debt will be on the negotiating table.”
Greek Finance Minister Yiannis Varoufakis, said he hoped that the country’s creditors would be more inclined to cooperate following the referendum.
“We had two requirements: to put an end to austerity and to restructure the debt,” he told reporters in Athens. “Unfortunately, the creditors refused any meaningful discussion and from the first moment planned to shut down our banks in order to impose their positions.”
“The Greek people today return this ultimatum back to the creditors. From tomorrow, with this No, we will extend a cooperation hand to our partners and call them one by one in order to reach common ground.”
Further potential for the gold price?
Further uncertainty over Greece could provide a boost for gold prices, but for now, some see the strong dollar continuing to pull back on gold.“The strength of the dollar as a haven continues, and investors may look beyond Greece to Fed rate action,” George Gero, vice president of global futures at RBC Capital Markets told Bloomberg. “This may be a headwind for gold.”
Still, some gold producers have stayed positive, stating that a Greek exit from the euro could bring “potential for immediate gains.”
“We may be in for the perfect storm if we get more turmoil from Greece with them being kicked out of the euro,” Raleigh Finlayson, managing director of Saracen Mineral Holdings (ASX:SAR) in Australia told Bloomberg. “You could see gold prices well north of A$1,600 ($1,197) and in a flash. That’s what we are all waiting to see over the next week or so.”
Finlayson said that a slightly stronger gold price in US dollars would be a boon for Australian companies.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 
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