Publications
Partners
Washington - Gold prices slipped before two key meetings: a policy update from the US Federal Reserve and a gathering of euro-area finance ministers to discuss Greece’s intensifying debt crisis.
The Fed meets in Washington on Tuesday and Wednesday to plot monetary strategy and update economic forecasts. Investors will scrutinise the central bank’s comments for any indications as to when it will raise borrowing costs for the first time since 2006.
While European finance ministers will meet in Luxembourg on June 18, Greece has no plans to present new proposals to unlock aid, Finance Minister Yanis Varoufakis told Bild newspaper. The country needs to seal an accord or get an extension before the euro area’s bailout expires on June 30, or risk missing payments on its debt of about €313bn.
READ: Greek PM says his country wants a deal
A senior analyst at Danske Bank, Jens Pedersen, said by phone from Copenhagen: "It’s all about Greece and about the Fed and it’s the interplay between the two that is shifting the market.”
“On the one hand, you have the uncertain situation in Greece supporting gold, while on the other, the first Fed hike creeping closer and that is probably weighing on gold.”
Bullion for immediate delivery slipped 0.3% to $1 182.87 an ounce at 11:00 in London, according to Bloomberg generic pricing. The precious metal swung between losses and gains earlier on Tuesday.
Dollar strengthened
Bullion for August delivery fell 0.3% to $1 182.20 on the Comex in New York, where futures trading volume was 28% below the 100-day average for the time of day.
Assets in gold-backed exchange-traded products retreated 2.8 metric tons to 1 584.9 tons as of Monday, declining for a second session to the lowest since March 2009.
Gold also fell as the dollar strengthened. The Bloomberg Dollar Spot Index, which measures the US currency’s strength against 10 major trading partners, gained 0.2%, rising for a third session in four. Bullion and the index have moved in opposite directions for nine sessions, the longest run since November.
READ: Gold up on safe-haven bids from Greek crisis
While the Fed probably won’t raise rates at its two-day meeting, it may do so as early as September, according to futures trading data. Higher rates curb bullion’s allure because the metal usually provides returns only through price gains.
Platinum for immediate delivery rose 0.2% to $1 089.82 an ounce, after touching $1 077.61 on Monday, the lowest since 2009. Silver fell 0.3% to $16.0405 an ounce. Palladium increased 0.9% to $741.82 an ounce.
