Gold and silver were sharply lower Tuesday morning as markets focused on news that less than 90% of Greek government bondholders would voluntarily accept the terms of a bond swap. Spot gold was down 1.94% at 10:40 a.m., having traded as high as $1,685.80 and as low as $1,661.90. The London morning reference price was fixed at $1,685.50, according to Kitco market data. Spot silver was showing a 3.44% loss, bid at $32.83 with an ask price of $32.93. The morning high as of time of writing was $33.39, and the low was $32.45. Tuesday’s reference price was set at $33.22 in the London a.m. Some 75% to 80% of Greek bondholders are expected to voluntarily accept the terms of an exchange of some 177 billion euros ($234 billion) of long-term Greek bonds, according to a Wall Street Journal report, less than the 90% necessary to avoid triggering a collective-action clause that would force all bondholders to swap old for new Greek debt. Enacting the collective-action clause would trigger payments on credit default swap contracts (CDS), the effects of which are largely unknown. The price of gold bullion dropped to a six-week low of $1,682 an ounce in London morning trading Tuesday because Greek debt worries and China lowering its GDP estimate for 2012 yesterday were slamming markets all over, according to BullionVault’s London Gold Market report. “We remain bearish so long as we remain below…the breached uptrend, currently at $1,768,� Scotia Mocatta technical analysts stated in a research note. “A lot of gold investors are still affected by the large sell-off last week,� commented Phillip Futures Singapore analyst Lynette Tan, adding that gold was “very strongly supported at the 200-day moving average.�

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