Gold prices finished lower for the fifth consecutive session as US equity markets reversed upwards, while a falling greenback didn’t provide much support.
Gold for June delivery on the Comex division of the New York Mercantile Exchange declined $1.30 to close at $1,185.60 per ounce. Trade ranged from $1,183.00 to $1,190.40, with support around $1,180.
“The selling pressure is likely to have been generated primarily by the futures market given that speculative financial investors have doubtless jettisoned further long positions,” Commerzbank said. “After all, the previous price rise had been speculatively driven to a large extent.”
Net longs in gold gained 5.71 million ounces or 69 percent as the price tested $1,230 per ounce in the week ending May 19, according to the Commodity Futures Trading Commission. But when the price dipped below the psychological $1,200 per ounce mark yesterday, weak-handed market participants likely shortened their positions.
In news, Greek officials and its creditors will again attempt to negotiate a bailout deal today; a lack of progress in recent talks pushed European equities lower yesterday, with the FTSE 100 falling 80 points. The Dow Jones also closed lower, falling more than 190 points.
Greece must repay four loans to the International Monetary Fund in June totalling 1.6 billion euros; Athens has so far indicated that it may not be able to make these payments without a deal in place.
Still, confidence in the European economy remains high – the GfK German consumer climate at 10.2 was better than expected, up from 10.1 previously and the highest reading since October 2011.
In a light data day, Belgian NBB Business Climate in May was down 4.9 percent, above estimates of a 5.7 percent decline. There is currently no data scheduled to be released today in the US, with weekly jobless claims and pending home sales due for release on Thursday.
In equity markets, the Dow Jones industrial average and S&P were up 0.7 percent and 0.9 percent respectively, while the euro was 0.2 percent stronger at 1.0890 against the dollar.
“The market had little in the way of economic data to influence direction, but equity markets bounced back after the sharp falls seen yesterday,” Sucden Financial said. “European markets are hopeful of a Greek debt agreement and corporate earnings supported the US market.
As for the other precious metals, Comex silver for July delivery was down less than one cent to close at $16.647 per ounce. Trade ranged from $16.580 to $16.810.
Platinum futures for July delivery on the Nymex were down $4.70 at $1,119.40 per ounce, while the most-actively traded palladium contract was at $785.20 per ounce, up $4.80.
(Editing by Tom Jennemann)
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