Once again Greece is the excuse for markets to track sideways to slightly down across the board. Commodity markets tanked along with equity markets as the dollar gained ground against the euro.
Gold prices were mostly flat with the shiny metal off $0.30 to $1,719.80 an ounce and silver down $0.18 to $33.46 an ounce in early trading Tuesday.
As I sit here and try to think of a time when we weren’t talking about Greece, it seems to me it’s just a convenient excuse for taking profits. I’m not at all certain that Greece leaving the European Union would be the end of the financial world as we know it. The biggest fear is not what would happen to Greece, but whether its exit would trigger a follow-on bank liquidity crisis in Europe, an event the European Central Bank has been working to hedge for quite some time.
As long as the Greek zombie continues to shuffle along, not quite dead and not quite alive, uncertainty will continue to hang in the air like fog over a cemetery. The uncertainty will make the U.S. look like a safe haven by comparison and more investors will hedge their currency bets with the U.S. dollar.
Unless the Federal Reserve finds a reason to print money we’ll continue to see commodities prices track in opposition to the rising dollar.