Azernews.Az

By Bloomberg

Gold and silver led losses in precious metals on speculation Chinese demand will fall during the Lunar New Year holiday.

Volumes for the Shanghai Gold Exchange’s benchmark spot contract dropped about 75 percent from Monday’s level to the lowest in more than a year, data from the bourse show. China, the second-biggest bullion buyer after India, will close markets for five days starting Wednesday.

“The market is anticipating that the Chinese buyer will not be there over the coming days to support prices,” Bernard Sin, a trader at MKS (Switzerland) SA, a Geneva-based refiner, said by phone. “The downside is vulnerable, while potential upside risk from the Greek situation has already been priced in.”

Gold for April delivery lost as much as 0.7 percent to $1,218.30 an ounce and traded at $1,220.10 by 8:12 a.m. on the Comex in New York. Silver for March delivery fell as much as 3.7 percent, the most this month, to $16.655 an ounce.

Floor trading was closed on Monday for the U.S. Presidents’ Day holiday and transactions will be booked Tuesday for settlement purposes.

Bullion has risen 3.1 percent in 2015 as investors sought a haven from slowing global economic growth and political turmoil over Greece’s bailout. The country is moving closer to a euro exit after the currency region’s finance ministers said there will be no more talks on financial support unless the Greek government requests an extension of its existing bailout program.

Greek Debt

After three weeks of sparring since Prime Minister Alexis Tsipras’s election victory, finance chiefs hardened their positions as negotiations in Brussels ended abruptly on Monday night with Greek Finance Minister Yanis Varoufakis refusing to bow to European demands.

Gold is still down 7.9 percent in the past year after an improving U.S. economy backed the case for higher interest rates. The Federal Reserve will release minutes of its January meeting on Wednesday. The metal for immediate delivery slipped 0.9 percent to $1,221.80, according to Bloomberg generic pricing.

Platinum for April delivery dropped 0.9 percent to $1,196.30 an ounce. Palladium for March declined 1.3 percent to $783.90 an ounce.