Gold and Greece

With the latest developments around the Greece debt crisis, Gold has not seen much of a positive sentiment from traders and investors. The reason for that would be that the U.S. Dollar is considered the best option to protect your capital and the well-known "Gold-Safe-Haven" scenario is not playing very well. At least for the moment. 

Greece, the land of debt, with missed payment to the International Monetary Fund, with banks shut down and with no sign of a new financial aid, is likely to default on other debts again this month. Being so deep into unknown territory, Greece is to vote on a referendum on Sunday. 

If they vote "yes," it will mean more spending cuts, more tax hikes, and more rounds of tense negotiations with European creditors. But in the long run, it could lead to a more united Europe. If the Greeks vote "no," it will likely trigger Greek exit from the Eurozone. That would cause turmoil for the Greek economy in the short run, but could ultimately give Greece more control over its destiny.

But at least Greece has nice places and lots of sunshine so they have that going on for them. 

Now, what would be Gold's reaction to all of this? It is well-known how easily Gold catches fire. A probable Greek exit from the Eurozone could add as much as $200 to the price of Gold in just a few seconds. And this time it will not have any correlation to the U.S. Dollar. Gold will divert and yet again gain the so-needed trust of market participants. Will Gold shine again? Soon we will know. 

Any open positions left over the weekend could result in massive gains that won't let you sleep from excitement. But they could also turn against you so bad you will not be able to see straight.

Chart: H8 XAUUSD