By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Gold fell for a fourth-straight day Wednesday, as concerns over political deadlock in Greece drained investors’ appetite for risk, helping to push the U.S. dollar higher.
Comex gold for June delivery GCM2 -1.59% traded down $23.80, or 1.5%, to $1,533.30 an ounce in electronic trading. The action extended weakness in the regular U.S. session Tuesday, where the gold contract settled at its lowest level since Dec. 29. See report on Tuesday’s gold moves.
Among other metals futures, July silver SIN2 -2.71% tumbled 2.8% to $27.29 an ounce, while July copper HGN2 -1.69% lost 1.4% to trade at $3.47 a pound.
The moves came as the U.S. dollar extended its string of gains, with the dollar index DXY +0.33% rising to 81.369, up from 81.286 in North American trade Tuesday. See Currencies.
Attention was focused on key meetings in Athens due later Wednesday to discuss the formation of a caretaker government, while U.K. data on inflation looked likely to set the tone for its monetary policy, according to analysts.
Credit Agricole CIB strategists said the Greek talks could set the stage for new elections that would need to take place before the end of June in order for Greece to get further bailout tranches in time to meet its debt commitments.
Meanwhile, data widely reported in the financial press Tuesday showed Greek depositors withdrew €700 million ($890 million) from the nation’s banks Monday, which could make Greek financial institutions more dependent on funding from the European Central Bank.
The Credit Agricole analysts said they expected the May inflation report due out from the Bank of England later Wednesday to “signal a broadly balanced view regarding the risks over inflation in the medium term,” and that a benign view of consumer inflation would help clear the way for new rounds of monetary easing.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
