Euro Gold Surges To EUR 1,168 After Greek Election Landslide

from Gold Core The crushing victory of the Greek opposition party Syriza in yesterday’s Greek elections has added to jitters in already jittery financial and foreign exchange markets. Head of Syriza, Alexis Tsipras waves after winning the elections in Athens The euro tumbled and gold in euros surged to its highest level since April 2013, at €1,167.94/oz as markets opened in Asia. The euro has since stablized but remains near a 11 year low against the dollar and is now down 16.7 percent against gold in January alone. Gold in Euros - 5 Days (Thomson Reuters) U.S. stock index futures fell, as did European shares prior to slight recoveries while borrowing costs for the euro zone’s most indebted states rose due to increasing concerns that the Syriza party looked set to take on Greece’s international lenders after the landslide victory. Greek markets saw worse losses. Ten-year yields rose 22 basis points to 8.99 percent, while Greece’s main stock index fell 0.6 percent, with shares in banks such as Alpha Bank and Piraeus Bank hit even more. Yields on lower-rated euro zone bonds bounced off record lows, with Italian 10-year yields up 2 basis point at 1.54 percent and Spanish and Portuguese yields 2 bps higher at 1.39 percent and 2.26 percent, respectively. Gold in Euros - 5 Years (Thomson Reuters) A period of uncertainty and heightened market nervousness now seems likely and this should benefit gold. Political uncertainty has already generated bank runs. Greek banks are already facing a serious liquidity problem as depositors have withdrawn billions of euros in recent days and weeks. Four major Greek banks have already asked for Emergency Liquidity Assistance (ELA) from the European Central Bank (ECB). Syriza leader Alexis Tsipras promised Greeks overnight that the five years of austerity imposed under bailout programs worth 240 billion euros from the European Union (EU) and the International Monetary Fund (IMF) were over. Prime Minister-elect Alexis Tsipras, who pledged to renegotiate the nation’s international bailout, won 149 out of a possible 300 seats in Parliament. His mandate is now to confront the nation’s programme of austerity, imposed in return for pledges of 240 billion euros in aid since May 2010. Syriza have been given the resounding backing of the Greek people to initiate reforms to the agreement the previous government negotiated with the Troika. His pledges include a writedown of Greek debt while persuading European creditors to keep aid flowing. The left-wing group are just two seats short of a majority with means they should be able to form a government with sympathetic individuals or parties. While Syriza have been careful to highlight their commitment to the EU and the Euro, there is no mistaking the hardline tone of Alexis Tsipras when it comes to dealing with the Troika of the IMF, the ECB and the European Commission (EC). In Athens yesterday, Tsipras told the crowds “Your decision today has made the Troika a thing of the past,” according to London’s Telegraph. Continue Reading>>>

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