Gold ticks up from two-week low as market eyes Greece
SINGAPORE – Gold edged up on Thursday, after sliding for the past four sessions to a two-week low, with investors awaiting news on Greece’s talks with its international lenders to avert a default for further trading cues.
Asian shares edged down and the dollar was treading water ahead of a meeting of European Union leaders later in the session as Greece continued last-minute efforts to stave off default.
“Gold looks to range trade between $1,169-$1,180 over the short term with the risk to the downside should positive news come out of the Greek debt negotiations,” Samuel Laughlin, a metals dealer at MKS Group said in a note.
Spot gold XAU= rose 0.1 percent to $1,176.35 an ounce by 0248 GMT, after dropping 2.2 percent in the past four sessions. Prices fell to a two-week low of $1,171.03 on Wednesday.
Gold, which is seen as a safe haven during times of financial and economic uncertainties, is facing additional pressure from a stronger dollar and expectations of a U.S. interest rate increase.
The dollar steadied after giving back gains against the yen early as debt negotiations to avert a Greek debt default hit a bump, while the euro treaded water after showing a more limited response.
Athens’ talks with creditors bogged down on details, with next week’s deadline to repay 1.6 billion euros to the International Monetary Fund looming and threatening to trigger the country’s removal from the euro zone.
The outlook for the dollar, however, remained upbeat amid expectations U.S. interest rates in the world’s largest economy would rise sooner than later.
Speculation that the U.S. Federal Reserve will raise rates for the first time in nearly a decade has weighed on gold prices this year. Higher rates lift the opportunity cost of holding non-yielding bullion.
Wednesday’s data on U.S. gross domestic product confirmed the improving outlook. The final figure for the first quarter showed contraction in the economy was less than previously estimated. – Reuters