Why Is Gold Not Reacting To Greece?-RBC's George Gero

There may be too many bears in the woods for gold says George Gero, a gold market veteran and vice president and precious metals strategist for RBC Capital Markets. Gold market bulls are disappointed the metal gained only slightly Monday, as the Greek debt crisis continues to unravel and produced no weekend agreement with the European Union. Gold prices saw tepid safe-haven demand and some short covering Monday. Gold quoted in Euros did see much better price gains Monday, reports said. Greek banks were closed for six days starting Monday and Greece’s prime minister has called for a July 5 referendum on new austerity measures. Greece’s present arrangement with its International Monetary Fund creditors expires on Tuesday—at which time Greece also needs to make a big debt payment to its EU/IMF creditors. "Last night as the news hit, gold was up $10 dollars - and as the day unfolded and the dollar became very expensive - it was very difficult for traders to continue to support gold, because gold is very expensive in dollar terms," explains Gero. "Because of possible currency controls in Greece you have seen a flight to cash and to bonds," he says. As to whether Greece will exit the EU, Gero says that right now it is a 50-50 chance. “I don't think a Grexit is as cut and dry as people think - I think people who live in countries like Greece and Italy and Spain who have had currency questions, will go to gold, which is liquid, portable and convertible into any currency.” Tune in now to Kitco News’ latest Gold Report live from our studio on Wall Street. Kitco News, June 29, 2015.