News over the weekend that talks broke down between Greece and its lenders sent gold and silver higher when trading resumed yesterday. Gold and silver briefly chipped away at resistance above $1,185.00 and $16.00, but it was short lived and in early U.S. trading gold, silver and platinum are back to Friday’s closing levels while palladium is down $8.00 at $670.00. The short and sweet on Greece is that debt repayment tomorrow is very unlikely. The government of Greece has imposed capital controls and closed the country’s banks through July 6. The citizens of Greece will have access to their deposits only by visiting an ATM machine where they will be limited to withdrawing 60 Euro per day. On July 5, Greece will vote on a referendum where they will decide what their future will be within the EU.
While it is not receiving nearly as much news today as Greece, stories are breaking that Puerto Rico is on the verge of default as it is unable to meet debt obligations tied to bonds that were sold to finance the government. Today brings us to the beginning of the “summer holiday season” and, while today may offer no indication of where prices are headed, I continue to think we will see increased volatility in July, August and beyond.