Gold futures reached the highest price in three months amid uncertainty in Greece and weak US data.
Gold for June delivery on the Comex division of the New York Mercantile Exchange increased $2.30 to close at $1,227.60 per ounce. Trade ranged from $1,221.20 to $1,232.00.
The dollar was last 1.16 percent stronger at 1.1316 against the euro, while the NAHB Housing Market Index was at 54 in May, off the 57 forecast and down from 56 in the previous month. The reading was a two-month low and signals a persistent slowdown from the first quarter through early parts of the second quarter.
“Gold has managed to rally up to a three-month high, with the metal catching up after Friday’s bout of dollar weakness,” Standard Bank said. “Expectations that a middling US economy will see a delay in interest rate hikes appear to be behind the move, with silver also strengthening further heading into US trade.”
Federal Reserve Bank of Chicago president Charles Evans renewed his call for the US central bank to refrain from raising interest rates this year as recent economic weakness is being debated as whether the factors are “transitory” in nature. Interest rates have been near zero since December 2008.
The Fed has removed all forward guidance and will rely on economic data to decide on when to raise rates. Evans said that allowing inflation to rise above the two-percent target “made sense” to achieve growth targets more quickly.
“[Evans] is perhaps the most singularly dovish of all of the voters in the rota this year,” Dennis Gartman, editor of the Gartman Letter, said. “He has not surprised us, with his comment that the Fed should be reticent/slow to move to raise its o/n fund rate and that the recent gains in employment must be sustained. It is good not to be surprised.”
Two documents over the weekend shed light on the parlous state of Greece’s finances. In a leaked note, the IMF said it believes there is “no possibility” of Greece meeting its debt obligations over the summer unless bailout funds are unlocked.
In the other, Prime Minister Alexis Tsipras, in a letter to the IMF, warned that Greece is almost out of cash and would miss repayments unless the European Central Bank immediately raised restrictions on the country’s ability to issue debt.
Although Greece must implement heavy economic reforms to unlock a third aid package, Tsipras is reluctant to go back on anti-austerity promises made in his election campaign.
In wider markets, the Dow Jones industrial average and S&P were up 0.2 percent and 0.4 percent respectively.
As for the other precious metals, Comex silver for July delivery was up a little over a cent at $17.69 per ounce. Trade has ranged from $17.475 to $17.775.
Platinum futures for July delivery on the Nymex were up $7.0 at $1,176.10 per ounce, while the most-actively traded palladium contract was $787.80, down $7.15.
(Editing by Tom Jennemann)
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