by Bill Musgrave – American Gold Exchange
Gold fell 0.9% to close under $1,266 after Greece proposed a compromise with its creditors, easing tensions in the Eurozone, boosting risk appetite, and reducing demand for safe havens.
Greece’s new leaders dropped demands to write-down foreign debt, offering instead to swap it for growth-linked bonds. The compromise reduced worries that Greece will renege on the terms of its bailout and possibly exit the euro, destabilizing the entire region.
Risk appetite jumped after the Greek news, with the Dow and Global Dow gaining more than 1.6% while safe-haven Treasury bonds fell along with gold. Equities were further supported by reports that U.S. automakers posted their best January in seven years. Oil led a rally in commodities by surging 6% to almost $53 a barrel, its first close over $50 in a month, on speculation that reductions in U.S. drilling will curtail supplies.
The other metals gained for the day. Silver and platinum edged up 0.2% while palladium, widely used in auto manufacturing, added 0.5%.
At the Comex close: February gold fell $11.40 to $1,265.60; March silver added 3 cents, to $17.28; April platinum picked up $2.40 to $1,230.90; and March palladium rose $4 to $792 an ounce.
