Weekly Round-Up: Gold Rises on German Rejection of Greek Proposal

The Greek debt talks that have dominated the resource space for the past three weeks continue to influence global gold prices and contributed to a fourth straight week of losses for the metal.

The yellow metal ticked up 0.4 percent on Friday to reach $1,211.90 an ounce, but the gain could not offset a 1.6-percent drop for the week overall, Reuters reported.

Metals fell earlier this week in response to a Greek loan extension proposal. Friday’s improvement reflects a surge of investor worry that followed Germany’s rejection of that plan, but prices are likely to drop again once talks resume.

“Germany rejected the Greek proposal … the market has had just a tiny knee-jerk reaction to that,” said Andrey Kryuchenkov, an analyst for NRC Commodities.

The Greek debt talks also boosted silver prices, which rose 0.9 percent to hit $16.47 an ounce.

Meanwhile, LME copper prices slid 1 percent to trade at $5,691 a tonne. The metal saw reduced trading volume in China, where markets are closed for the Lunar New Year. Analysts anticipate that copper will rebound once those markets reopen.

Caroline Bain, a senior commodities economist at Capital Economics, said to Reuters,”[w]e are quite positive on the outlook for copper prices. It will be those first few weeks after the Lunar New Year when we’re hoping to see demand picking up.”

For its part, COMEX copper dropped 1.13 percent to trade at $1.13, Bloomberg reported.

Prices for Brent crude climbed 1.4 percent to $61.05 a barrel, states another Bloomberg article. Declining rig counts constrained oil supply and helped stabilize the fuel above $60. While the smaller number of rigs will limit supply later this year, oil will remain readily available in the short term.

“This does nothing to change the considerable oversupply on the oil market,” Reuters quotes Commerzbank (ETR:CBK) analyst Carsten Fritsch as saying.

Related reading: 

Gold Flirting with $1,200 an Ounce

Silver Price Stuck Below $17 per Ounce