Gold Hits 6-Week High, Papandreou “Won’t Last til Tonight”, IMF says “No Greek Loan til Referendum” but “Referendum is Dead”

ondon Gold Market Report

U.S. DOLLAR prices to buy gold jumped to a six-week high of $1757 an ounce late on Thursday morning – though only 0.7% above last Friday’s close – following reports that Greek prime minister George Papandreou was on the verge of offering his resignation.

Stocks and commodities gained, while the Euro dropped sharply following the European Central Bank’s decision to cut interest rates.

Prices to buy silver also rose, hitting $34.73 per ounce – though still 1.7% down for the week so far.

“Silver is going neither here nor there,” one Shanghai-based trader tells news agency Reuters, citing a “lack of physical demand from industrial users”.

Eurozone leaders were openly discussing a Greek exit from the Euro last night, while the Greek government was reportedly close to collapse, after another member of prime minister Papandreou’s party indicated they will not support the government in a confidence vote scheduled for tomorrow – taking Papandreou’s majority down to one.

“It seems that people prefer to buy gold [with Euros] which makes sense because of all the problems there,” says Walter de Wet, commodities strategist at Standard Bank.

Greek finance minister Evangelos Venizelos meantime caused a split in the cabinet when he indicated he is not in favor of holding a referendum on last week’s Euro Summit deal, which Papandreou says he hopes to hold on December 4.

“The referendum is dead,” reckons Nikos Salayannis, another member of Papandreou’s ruling Pasok party.

“I don’t think the government will last until tonight,” added Costas Panagopoulos, managing director of polling company ALCO, early on Thursday.

An ALCO poll conducted in May 2010, shortly after the first Greek bailout deal was agreed, found that at that time 51.4% of Greeks were in favor of austerity measures in return for international aid. Strikes and protests were favored by 28%.

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via Gold Hits 6-Week High, Papandreou “Won’t Last til Tonight”, IMF says “No Greek Loan til Referendum” but “Referendum is Dead” – Buy Gold Online with the Bullion Vault – GoldSeek.com.

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