Daily outlook for gold prices: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-Progress in the debt dispute with Greece drove gold briefly below $1,200 per troy ounce last Friday. As the new week gets underway, the yellow precious metal is again trading below this threshold. The apparent agreement between Greece and the Eurogroup paves the way for the existing aid programme to be extended for four months. The Greek government will be presenting its announced list of reforms today.

-At the present time, virtually no-one on the markets still expects the deal to fall through. The decline in the price of gold that has been observed for the past 4½ weeks has gone hand in hand with a noticeable withdrawal on the part of speculative financial investors, who according to the CFTC's statistics further slashed their net long positions by a very significant 20% to 95,700 contracts in the week to 17 February.

-This puts them at their lowest level in six weeks, and was also the third consecutive weekly reduction. During this period net long positions were cut by 38% and the gold price shed a good $80 or 6.4%. Money managers also retreated noticeably from silver (-15%) and platinum (-17%) in the latest reporting week.

-In the latter case, this was accompanied by strong outflows from the ETFs: holdings in the platinum ETFs tracked by Bloomberg have been reduced by 78,000 ounces of 2.9% so far in February. This morning, the platinum price hit $1,156 per troy ounce, its lowest level since July 2009. What is more, platinum is currently approx. $40 per troy ounce cheaper than gold.