Commodities Remain Pressured as Greece Discusses Austerity Measures

Gold extended the selloff late last week as the commodity market slumped and the US dollar strengthened. Currently trading at 1500, the benchmark contract for the yellow metal has lost $80/oz and $60/oz from the all-time high and June's high respectively. The 3-day selloff has ruined hopes of resumption of gold's uptrend in 2Q11. Despite these, we retain the view that gold will be supported by retail and official buying as price corrects amid low interest-rate environments, lingering sovereign debt crisis in Greece and uncertainties in global economic outlook.

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Commodities Remain Pressured as Greece Discusses Austerity Measures