Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.8% to close above $1,173 as Greece's resounding rejection of austerity measures triggered uncertainty about its future in the Eurozone, sending global investors scurrying for safe-haven assets.

In yesterday's snap referendum, Greeks voted strongly against the onerous conditions demanded by international creditors in exchange for additional bailout aid. The vote pushed the cash-strapped nation closer bankruptcy and a possible exit from the Eurozone. Without new emergency funding from the ECB, which is unlikely to be forthcoming, Greek banks may run out of capital when they reopen this week.

Equities retreated as risk-off sentiment took the markets. The Global Dow plunged 1.3% while the Dow last around 0.5%. U.S. Treasury bonds rallied alongside gold on flights to safety.

Gold received additional support from growing expectations that the Fed may defer raising interest rates until December or later because of flagging economic data. Last week's nonfarm payrolls report showed disappointing growth in the labor market and no growth in wages, two key criteria underpinning the Fed's timing. The U.S. service sector slowed for the third straight month in June, according to Markit's PMI, released today, which may slow GDP expansion in the second half of the year. The ISM report, however, showed a slight uptick in services last month.

New, aggressive stimulus from China is adding to bullishness in the gold market. To re-inflate its plunging stock markets, which have lost around $2.7 trillion in value in the last three weeks, the PBOC is taking unpresented measures to boost liquidity and reinvestment, some of which is expected to find its way into precious metals.

The other precious metals were mixed, with silver adding 1.2% while platinum and palladium fell 1.6% and 2.6%.respectively.

At the Comex close: August gold gained $9.70 to $1,173.20; September silver rose 19 cents to $15.75; October platinum fell $17.70 to $1,066.30; and September palladium lost $18 to $676.15 an ounce.