Gold Price Ends Lower On Uncertainties Over Greece
New York (Jun 25) Gold futures dropped for a fifth straight session on Thursday, having fluctuated for much of the day, as uncertainties over Greece's continued, with no signs of any deal before the deadline of June 30.
After Greece's latest proposals were rejected, creditors offered a counter-proposal and insist Athens accept it.
Nevertheless, Greece and its international creditors have been holding a number of meetings in an attempt to reach a solution. However, differences continue to hamper any real progress and any deal would still need the approval of the Greek and German parliaments. Reports suggest negotiations could go on until Sunday.
The disagreement remains mainly on debt relief sought by the Athens, a demand that is likely to face stiff opposition within the Eurogroup. Despite disagreements, some Greek and EU officials reportedly said differences have narrowed and a deal is still possible.
Earlier in the day, Greek Prime Minister Tsipras met the chiefs of the country's creditors - the European Commission, the European Central Bank and the International Monetary Fund, at the commission's headquarters in Brussels.
Greece is burdened with a Eur 1.5 billion payment to the IMF at the end of June. The country has indicated that it will not be able to make the payment without further aid. The country needs to clinch a deal as soon as possible that could unlock Eur 7.2 billion aid as soon as next week.
In some positive economic news from the U.S., personal spending for May logged a bigger than expected increase, while personal income showed continued growth. Weekly jobless claims for unemployment benefits in the U.S. also increased but less than anticipated.
Gold for August delivery, the most actively traded contract, dropped $1.10 or 0.1 percent, to settle at $1,171.80 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.
Gold for August delivery scaled an intraday high of $1,177.30 and a low of $1,170.50 an ounce.
On Wednesday, gold prices dropped $3.70 or 0.3 percent, to settle at $1,172.90 an ounce, as Greece struggled to come to an agreement with its creditors on the much needed financial aid, with its latest proposals rejected by creditors and were instead offered a counter-proposal.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 706.37 tons on Thursday, from its previous close of 705.47 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.14 on Thursday, down from its previous close of 95.28 on Wednesday in late North American trade. The dollar scaled a high of 95.51 intraday and a low of 95.09.
The euro trended higher against the dollar at $1.1209 on Thursday, as compared to its previous close of $1.1205 in North American trade late Wednesday. The euro scaled a high of $1.1227 intraday and a low of $1.1155.
On the economic front, first-time claims for U.S. unemployment benefits edged slightly higher in the week ended June 20, a report from the Labor Department showed Thursday. Initial jobless claims inched up to 271,000, an increase of 3,000 from the previous week's revised level of 268,000. Economists expected jobless claims to rise to 273,000 from the 267,000 originally reported for the previous week.
Personal spending in the U.S. rose by more than expected in the month of May, the Commerce Department revealed in a report on Thursday, with spending witnessed the strongest growth in nearly six years.
The Commerce Department said personal spending jumped by 0.9 percent in May following a revised 0.1 percent uptick in April. Spending had been expected to increase by 0.7 percent after originally being reported as nearly flat in the previous month.
The sharp increase in spending came amid continued growth in personal income, which rose by 0.5 percent in May, matching the upwardly revised increase seen in April. Economists had expected income to rise by 0.4 percent, which would have matched the growth originally reported for the previous month.
German consumer confidence is set to fall in July as unresolved debt crisis in Greece weigh on the economic outlook. Nonetheless, it remains at an elevated level as income expectations reached a new post-reunification record. The forward-looking consumer sentiment index dropped to 10.1 in July from 10.2 in June, survey data from market research group GfK showed Thursday. The score was expected to remain at 10.2.
The leading index for France, which measures the future economic activity, inched up in April, helped by large positive contributions from building permits and stock prices, survey results from the Conference Board showed Thursday. The Conference Board leading economic index edged up 0.1 percent in April, following a revised 0.4 percent increase in March. Out of the seven components, five contributed positively to the index in April.
British retailers said their sales growth slowed in June but it is expected to improve next month, the latest monthly Distributive Trades Survey from the Confederation of British Industry showed Thursday. About 44 percent of retailers said sales volumes increased from a year ago, while 15 percent said they were down, giving a balance of +29 percent for June. It was expected to drop to 35 percent.