Gold price steadies as higher dollar offsets bids from Greek crisis
London (Jun 15) Gold was little changed on Monday, as the impact of a stronger dollar ahead of a Federal Reserve policy meeting was offset by persistent uncertainty around Greece after debt talks with its creditors stalled.
Spot gold was unchanged at $1,180.90 an ounce by 1143 GMT, while U.S. gold futures for August delivery were up $1.40 an ounce at $1,180.40.
The dollar rose 0.3 percent against a basket of major currencies, making dollar-denominated gold more expensive for holders of other currencies.
Investors hoped the Federal Reserve could offer a clear signal on the timing of its first interest rate hike in nearly a decade during its June 16-17 policy meeting.
"Yellen can now be a bit more optimistic about growth, maybe she will intimate that the path is being prepared for a rate rise (by year-end)," Societe Generale analyst Robin Bhar said.
A rate hike could boost the dollar further, in turn diminishing demand for non-interest-paying gold.
Recent strong U.S. economic data has been supporting expectations that a rate hike could come before the end of the year while dragging gold lower - prices reached a near-two-month low at $1,162.35 on June 5 after better-than-forecast U.S. nonfarm payrolls.
Gold failed to fully benefit from lower European equities after a lack of concrete progress on the Greek crisis.
Gold is typically in demand during times of political and financial uncertainty, although gains tend to be short-lived.
"Gold has drawn limited safe-haven interest - enough to stall the downside - and instead focussed on U.S. monetary policy," Barclays said in a note.
"The floor for prices is relatively soft, given the seasonally slow period for demand, which has been compounded by continued exchange-traded product outflows and the establishment of fresh shorts."
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, are at their lowest since 2008, having seen more outflows on Friday. Other data showed hedge funds and money managers slashed their net long stance in gold during the week ended June 9.
Physical demand in top consuming region Asia has been weak as a tight price range and better yields elsewhere have kept investors away.
Silver was up 0.2 percent at $15.95 an ounce, while platinum fell to a six-year low of $1,074.75 an ounce and palladium lost 0.3 percent to $734.50 an ounce.
Source: Reuters
