Gold drops near four-month low amid Greece concerns, Chinese shares selloff
Gold dropped near its lowest level in four months on Wednesday as it continued to fail to act as a safe haven amid the undergoing concerns from Greece and selloff in Chinese shares.
The yellow metal hit a low of $1147.09 an ounce at early trading, yet it pared some of the losses to trade around $1154.05.
The situation in Greece remains uncertain after eurozone finance ministers offered Greece a deadline of this week to submit a proposal that will be discussed at an EU meeting on Sunday.
Greek banks remained closed for a second week, amid a sharp drop in liquidity, where the ECB will continue to support Greek banks with the minimum liquidity until Sunday.
On the other hand, the selloff in Chinese equities resumed on Wednesday, where Shanghai Index plunged 6 percent, to complete a drop of 37 percent over the previous few weeks, on worries of slowdown in growth in the world’s second-biggest economy.
Still, gold is unable to gain demand as a safe haven asset as investors resorted to other refuges such as the yen that soared against major currencies on Wednesday.
The dollar pared its earlier losses after touching a bottom of 96.52 to hover around 96.88, according to the dollar index that tracks the green currency’s movements against a basket of six currencies.