Gold held a drop after Greece reached a deal with creditors that could pave the way to a new bailout, damping demand for the metal as a haven asset and shifting investors’ focus to the probable timing of a U.S. interest-rate increase.
Bullion for immediate delivery was at $1,156.88 an ounce at 7:35 a.m. in Singapore from $1,157.98 a day earlier, according to Bloomberg generic pricing. The metal declined as much as 1.1 percent on Monday to $1,151.27, the lowest price since July 8, and ended 0.5 percent lower to snap three days of gains.
Gold dropped 2.3 percent this year as the Federal Reserve signaled it planned to boost rates. Fed Chair Janet Yellen maintained her call on Friday for an increase this year, and the rate-setting Federal Open Market Committee will gather at the end of this month to assess the economic recovery. While equities rallied on Monday as the Greek deal was announced, the plan may yet come unstuck as the terms require approval from Greece’s parliament this week.
Higher rates curb the appeal of bullion, which doesn’t pay interest or give returns like assets such as bonds. The Bloomberg Dollar Spot Index was little changed on Tuesday after rising 0.6 percent on Monday. An appreciating dollar tends to restrict gold’s gains.
Futures for delivery in August were little changed at $1,156.40 an ounce from $1,155.50 on the Comex in New York on Monday, when prices lost 0.5 percent. Silver for immediate delivery was 0.2 percent lower at $15.4831 an ounce.
Platinum dropped 0.3 percent to $1,031.25 an ounce, while palladium lost 0.4 percent to $658 an ounce.
Source : Bloomberg