Concerns over Greece also weigh on the markets after officials from the International Monetary Fund and Europe failed to reach an agreement on how best to reduce Greece’s debt to manageable levels following talks on Monday.
In the Euro-group meeting that started yesterday , Jean-Claude Juncker told the press that the decision on Greece's €31.5B next bailout disbursement will not come until next Tuesday November 20, when they will meet again.
IMF's chief, Christine Lagarde, noted additional work should be done on Greece's debt sustainability in coming days.
This decision came as a surprise to Greece and the market as it already approved the new austerity program despite the strong protest by the Greek crowd. Following this decision, Greece is now trying to avoid a default scenario on a €5 billion debt repayment on November 16. However, Greece is expected to roll over its T-Bills on November 16 to avoid default.
Investors will watch cautiously the ZEW report on German economic sentiment and England Inflation report later in the session to get further understanding the EU economic situation besides Spain and Greece.
GOLD prices fell as investors run to the dollar as policymakers failed to reach an agreement or progress on both sides of the Atlantic.
Investors remained concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January.
Ratings agency Fitch warned last week that the U.S.’s triple-A rating would be at risk if Congress and President Barack Obama did not immediately take action to avoid the crisis.
Even though the Macro outlook remains uncertain, Prices remained supported amid speculation demand from China and India, the world’s two largest gold consumers, will remain strong in the near-term.
In India, officials said demand for the precious metal was expected to climb by as much as 15% in the current quarter due to a decline in prices and festival demand.