(Kitco News) - It appears that Greek citizens are preparing for the worst, buying more gold coins as a safe-haven currency while the nation’s politicians are unable to come to an agreement with its European creditors.
According to reports, Greece’s central bank hasn’t seen an increase in gold demand. It said it sold 5,849 gold coins in January, which is not “abnormal activity.” However, in a recent interview with Bloomberg, Lisa Elward, head of gold sales at the Royal Mint, said “there has been a noticeable increase in demand in this last quarter” coming from Greek customers.
Bernard Dahdah, precious metals analysts for Natixis, said that although it is interesting to note the increased demand from Greece, it is never going to be “monumental.” He added that it is not surprising that demand for gold coins has increased as it is seen as a safe haven. Dahdah also suspects that demand for U.S. dollars has increased in the country.
However, he added that with prices below the 50-day moving average, the gold market appears to be ignoring the growing uncertainty in Europe. The yellow metal remain under pressure from a stronger U.S. dollar.
“Despite the ongoing negotiations between Greece and the EU, positive developments in the U.S. are nevertheless beginning to overshadow events in Europe,” he said.
Talks between Greece and other European nations will resume on Monday as no agreement was reached in meetings Wednesday and Thursday. Greece has until the end of the month to come up with a new bailout agreement before it runs out of funding and threatens to default on some of its debt.
Analysts are expecting Greece and the EU to eventually come to a last-minute agreement, but they also noted that the threat of a “Grexit” is at its highest point since 2012.
By Neils Christensen of Kitco News; nchristensen@kitco.com
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