Gold prices declined on Tuesday as market participants grew wary of mixed-signals concerning Greece, while turning their attention to the Federal Open Market Committee (FOMC) meeting that begins today.
Gold for August delivery on Comex division of the New York Mercantile Exchange fell $3.10 to $1,182.70 per ounce. Trade has ranged from $1,181.20 to $1,187.40.
After negotiation talks in Brussels deteriorated in less than an hour, there is a growing sentiment that Greek will exit the eurozone. The Mediterranean country owes 1.6 billion euros to the International Monetary Fund (IMF) by the end of the month.
Thursday’s eurogroup meeting is now being proposed as the next opportunity for negotiations, though this latest setback puts the country one step closer to a default that may seal an exit from the bloc.
“Talks in Europe between Greece and its creditors have collapsed, with Greece also indicating that it will not come back to the table with a new set of reforms,” Tom Moore, analyst at FastMarkets, said. “With talks having stalled ahead of the technical deadline for an agreement on Thursday, the likelihood of a deal being reached is now almost non-existent.”
Today marks the beginning of the FOMC’s two day meeting. The US central bank is not expected to raise interest rates but a increase is likely to occur later in the year with most speculators tabbing September.
Turning to wider markets, Germany’s DAX and France’s CAC-40 was down 0.2 percent and 0.1 percent respectively, while the euro was 0.5 percent softer at $1.1232 against the dollar.
In data today, May US building permits was 1.28 million, above forecasts of 1.11 million. However, housing starts in May was 1.04 million, below estimates of 1.10 million. In Germany, Final CPI month-over-month in May was in-line with expecations of an increase of 0.1 percent.
As for the other precious metals, Comex silver for July delivery was down 1.7 cents at $15.910 per ounce. Trade has ranged from $15.890 to $16.105.
Platinum futures for July delivery on the Nymex were down $7.00 at $1,081.50 per ounce, while the most actively traded palladium contract was at $735.35 per ounce, up $1.20.
(Editing by Tom Jennemann)
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