Gold price slips below $1,200 with Greek talks in focus

Shanghai (Jun 22)  Gold eased from a near-four-week high on Monday as possible signs of progress in Greek debt talks curbed safe-haven bids for the metal and pushed up equities.

Spot gold slipped 0.3 percent to $1,196.60 an ounce by 0047 GMT, off the $1,205.50 hit last week, its highest since May 26.

In recent days, bullion has seen some safe-haven bids from investors worried over a Greek debt crisis that they fear could result in a default and the exit of Athens from the euro zone.

Greek Prime Minister Alexis Tsipras made a new offer on a reform package to foreign creditors on Sunday, signalling 11th-hour concessions to break a deadlock that has pushed Greece to the brink of bankruptcy. An emergency euro zone summit meeting is scheduled for later in the day.
Asian shares, U.S. stock futures and the euro ticked up on Monday on hopes for a deal.

"There is a lot of caution out there regarding Greece. Gold's direction will depend on the meeting later today," said a trader in Sydney.
    The absence of top consumer China, which is shut for a
public holiday, also hurt gold, the trader said.
    Hedge funds and money managers lowered net long positions in
gold and slashed bullish bets on silver to the
lowest in seven months in the week ended June 16.
 
    Speculators' short positions in gold rose to
the highest on record at 88,216 lots.
    The positioning reflects the stance of investors before a
Federal Reserve meeting last week, when policymakers said a rate
increase would be appropriate only after further improvement in
the labour market and with greater confidence that inflation
would rise. Prices rose following those comments.
    Non-interest-paying gold has benefited from record low
interest rates following the 2007-2009 financial crisis. Higher
rates would increase the opportunity cost of holding the metal.
    "Yellen's comments including the need for decisive evidence,
as well as the heightened uncertainty surrounding Greece, have
limited the downside risk for gold in the absence of physical
demand," Barclays analysts said in a note.
    "While we believe the floor for prices remains soft in the
coming weeks, the events surrounding Greece in the coming
sessions could still reignite interest in gold."
    Traders will also be monitoring gold sector wage talks that
are due to start on Monday.
    The newly elected head of South Africa's biggest mine union
said on Sunday that his members were still being paid
"apartheid" wages, signalling a hard line ahead of the talks.

Source: Reuters