Gold Price Ends Lower On Likely Rate Hike This Year
San Francisco (July 10) Gold futures ended lower for a second straight session, after U.S. Federal Reserve Chief Janet Yellen stressed there will be an interest hike this year, with investors preferring the riskier equity assets with global markets on the rise.
The down-tick in gold prices come despite the dollar trending lower against some major currencies.
For the week, gold futures shed about 0.5 percent.
Speaking at the City Club of Cleveland on Friday, Yellen said the economy showed signs of improving and expects to introduce a rate hike this year. She stressed the momentum of the U.S. economy is good with job gains leading to stronger consumer spending and consequently more employment and wage gains.
Investors also kept a close watch on developments in Europe, where efforts are on for a last-ditch effort to keep Greece in their monetary union. Greece has threatened to go it alone unless they receive less punitive terms for bailout funds that will help the nation avoid a default on its sovereign debt.
Both Greece and its creditors have been digging in their heels, although reports indicate a deal may be on the cards today.
Greek Prime Minister Alexis Tsipras is seeking the backing of his parliament for a EUR 13 billion austerity plan under the European Stability Mechanism. Greece had submitted the proposal to its international creditors Thursday night.
"We are confronted with crucial decisions," Tsipras said. "We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not given a mandate to take Greece out of the euro zone. We are all in this together."
While addressing parliament on Friday evening, Greece finance minister Euclid Tsakalatos outlined a proposal which includes an ESM-ECB debt swap, significant fiscal and investment reforms and further debt relief as part of the program.
Gold for August delivery, the most actively traded contract, dropped $1.30 or 0.1 percent, to settle at $1,157.90 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.
Gold for August delivery scaled an intraday high of $1,164.50 and a low of $1,156.40 an ounce.
Source: RTTnews
