Gold Price Ends Lower After Greek Bailout Deal
New York (July 13) Gold futures ended lower for a third straight session on Monday, after Greece reached a deal to land a third bailout following last-ditch efforts in talks between Greece and its creditors with an agreement on Sunday. Nevertheless, the deal still needs to be approved by lawmakers in Athens.
Eurozone leaders unanimously reached an agreement early Monday to start talks for a EUR 82-86 billion third bailout program for Greece after hours of negotiations, empowering the country to battle a severe economic crisis and remain in the single currency bloc.
European Council President Donald Tusk said, "EuroSummit has unanimously reached agreement. All ready to go for ESM [European Stability Mechanism] program for Greece with serious reforms & financial support."
Greece needs EUR 7 billion by July 20 and an extra EUR 5 billion by August.
Investor attention will now likely shift to the U.S. economy and monetary policy this week.
Gold for August delivery, the most actively traded contract, dropped $2.50 or 0.2 percent, to settle at $1,155.40 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.
Gold for August delivery scaled an intraday high of $1,163.90 and a low of $1,149.80 an ounce.
On Thursday, gold prices dropped $1.30 or 0.1 percent, to settle at $1,157.90 an ounce, after U.S. Federal Reserve Chief Janet Yellen indicated there will be an interest hike this year, with investors opting for the riskier equity assets.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, inched up to 707.58 tons on Monday from its previous close of 707.55 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.76 on Monday, up from its previous close of 95.99 on Friday in late North American trade. The dollar scaled a high of 96.80 intraday and a low of 95.63.
The euro trended lower against the dollar at $1.1009 on Monday, as compared to its previous close of $1.1155 in North American trade late Friday. The euro scaled a high of $1.1198 intraday and a low of $1.1006.
On the economic front, Chinese exports increased at a faster-than-expected pace in June, while imports fell less-than-expected, official data showed Monday. Exports rose 2.8 percent year-over-year in June, exceeding economists' expectations for 1.0 percent growth.
Meanwhile, imports slid 6.1 percent in June from the previous year, much slower than the 15.5 percent sharp decline expected by economists. China's trade surplus came in at $46.54 billion in June, compared to the surplus of $59.49 billion in May. Economists expected a surplus of $56.7 billion in June.
Japan's industrial production dropped less than initially estimated in May, data from the Ministry of Economy, Trade and Industry showed Monday. Industrial production declined a seasonally adjusted 2.1 percent month-over-month in May, revised down from a 2.2 percent drop in the flash data. In April, production had risen 1.2 percent. Shipments in May decreased 1.9 percent from the previous month, came in line with preliminary report.
Source: RTTnews
