Gold prices ease in Asia as markets await next act in Greece drama

Investing.com - Gold prices eased in Asia on Wednesday as investors await more clarity on Greece after it formally missed a payment on its sovereign debt, but also sought more time.

Mr. Gerry Rice, Director of Communications at the International Monetary Fund (IMF), made the following statement today regarding Greece's financial obligations to the IMF due today:

"I confirm that the SDR 1.2 billion repayment (about €1.5 billion) due by Greece to the IMF today has not been received. We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared.

"I can also confirm that the IMF received a request today from the Greek authorities for an extension of Greece's repayment obligation that fell due today, which will go to the IMF's Executive Board in due course."

On the Comex division of the New York Mercantile Exchange, gold for August delivery dipped 0.04% to $1,172.20 a troy ounce.

Silver for September delivery fell 0.17% to $15.662 a troy ounce.

Copper for September delivery dipped 0.13% to $2.618 a pound.

Overnight, gold futures fell mildly extending losses from the previous session amid a stronger dollar, as emergency talks in the Greek Debt Crisis dragged into the final hours before a second bailout from international creditors expired on Tuesday evening.

Greece and its international creditors failed to reach a deal before the expiration of a €240 billion bailout, leading to the loss of the final €7.2 billion tranche of the stimulus package.

Separately, Greece said it would not make a €1.5 billion payment to the IMF stemming from a 2010 bailout, before the end of Tuesday's deadline.

Greece joins Zimbabwe, Sudan, Somalia and Liberia as the only nations with overdue repayments to the IMF over the last decade. While Greece will become the first advanced economy in the 71-year history of the IMF to be placed in arrears, its failure to meet the obligation on time will not yet result in full default on its sovereign debt.

If Greece remains in arrears only for a short period of time, there is a possibility the IMF will show leniency to the Mediterranean state once it repays its debts. Any nation in arrears with the IMF, which occurs when a debt or liability is overdue, is unable to receive access to the organization's resources until the debts are settled.

Earlier, Greece proposed a two-year bailout program under the European Stability Mechanism, the euro zone's bailout fund. The proposal comes day after the Greek parliament scheduled a public referendum on July 5, which is largely viewed as a proxy on whether its citizens would like to remain in the euro zone.

“From the first moment, we made clear that the decision to hold a referendum is not the end but the continuation of negotiations for better terms for the Greek people," the Greek government said in a statement.

"The Greek government will until the end seek a viable agreement within the euro.”

Germany chancellor Angela Merkel, meanwhile, remained adamant that no bailout discussions should be held between the two sides until after the referendum is completed.

Gold is viewed as a safe haven for investors in periods of severe economic instability.