Gold falls on dollar strength following Greek election
Peter Walden, News Editor
26 Jan 2015, 12:15 p.m.
The gold price failed to hold onto last week’s gains as a strengthening U.S. dollar offset safe haven buying following Syriza’s win in the Greek election.
Syriza, the anti-bailout party comfortably won yesterday’s election raising fears the Greeks could decide to default on its 240 billion euro bailout. Syriza lead by leftist leader Alexis Tsipras campaigned on the promise he would renegotiate the bailouts imposed on the country by the European Union and the International Monetary Fund.
A number of senior European politicians have warned Tsipras that Greece must respect the terms and conditions of the bailout. If Greece does default it would send shockwaves across the financial markets. Following the result the euro fell to a new 11 year low against the dollar.
Syriza won 149 seats which is two seats short of having an absolute majority. The election result will now be the main issue discussed on Monday when the 19 Eurozone finance meet in Brussels.
The gold price has risen 9% this year as investors turn to the yellow metals for protection from falling oil prices, volatility in the currency markets and increased uncertainty in the European Union.
Gold is currently trading at £854.57 per ounce, silver at £11.98, platinum £834.41 per ounce and palladium £510.64 per ounce.