Gold and silver set to test resistance levels after Greek bailout approved
Precious metals prices are rising this morning after euro zone finance ministers delivered on expectations and sealed a deal for a second bailout for debt-laden Greece.
The decision will help Athens resolve its immediate payment needs, but Greece still faces bleak financial and economic outlook in coming years. The supportive factors, euro zone debt crisis and expectation on loosening monetary policies around the world have been around for a while and gold needs something new to break the range. The rising tensions between Iran and the West, which pushed Brent crude futures above $120 a barrel, could surface as a key driver for gold if the situation deteriorates.
The precious metals have seen a positive start this morning. Caution awaiting the outcome of the Greek deal has confined the precious metals to tight ranges in recent weeks. The new deal could now see the metals exit their consolidation phase and potentially look to challenge higher with both gold and silver bolstered by investment and fund related buying interest. Initial resistance in gold is pegged at $1753/63 with clearance opening the way to challenge $1800; similarly for silver clearance of resistance at $34.53 could see the metal target Octobers high of $35.68.
For more on gold and silver click on the links below;
Eric Sprott: Silver Will Become a Currency Again
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Record High Gold Prices Fail to Curb Global Demand
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