Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.5%, closing at a six-week low under $1,209, on expectations that a short-term resolution to the Greek debt crisis is at hand.

Greece is expected to ask for a six-month extension on its debt obligations on Wednesday, diffusing the stalemate with its EU creditors. After yesterday's talks ended abruptly in disagreement, Greece now appears ready to compromise in its demands for new terms for its four-year old bailout agreement, seeking instead to defer renegotiations and receive more time to meet its current obligations.

The change in position removed some uncertainty from the markets, spurring risk appetite and reducing safe-haven demand for precious metals. The S&P 500 rose to a new intraday record above 2,100.

Gold was also pressured by speculation that tomorrow's release of the minutes of the last Fed meeting will underscore a growing disposition within the central bank to raise interest rates by summer. Higher rates will boost the dollar and weigh on demand for gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

The other precious metals generally fell harder than gold. Silver plummeted 5.3% while platinum and palladium dropped 2.5% and 1.4%, respectively.

At the Comex close: April gold fell $18.50 to $1,208.60; March silver plummeted 92 cent to $16.38; April platinum lost $30.50, to $1,177; and March palladium fell $11.20 to $783.25 an ounce.