Gold broke above the psychological $1,200 per ounce mark on Monday but the mid-session gains evaporated quickly as unconvinced investors booked profits.
Gold for August delivery on the Comex division of the New York Mercantile Exchange declined $1.10 to close at $1,188.70 per ounce. Trade ranged from $1,184.00 to $1,1204.70.
“Gold bugs appeared to be in their element this afternoon following gold explosive run through $1,200 on the back of more Greek fears and a strong us dollar, however the move met with fierce selling and was inevitably short lived,” Triland Metals said.
“Gold continues to remain indecisive as we flutter better $1,175-$1,225. Given the price action over the past few weeks a move to the downside continues to look more likely,” the broker added.
Meanwhile, in the eurozone, there is further uncertainty emanating from Greece ahead of the IMF payment due this Friday. A potential default from the Mediterranean country would likely add volatility to global markets – especially the euro and equities.
“Persistent uncertainty in Greece, particularly ahead of the IMF payment due this Friday, helped keep gold supported last week in the face of a strengthening dollar,” UBS analyst Edel Tully said, noting that the net Comex positioning seems unlikely to gain momentum while eurozone risks continue to underpin gold this week.
“Nothing has shifted materially in terms of the macro backdrop for gold for now, and in the absence of a more thematic catalyst to create a clear price trend, the focus on economic data releases is bound to be heightened,” Tully added.
In a heavy US data day, personal spending month-over-month in April came in at a null percent, with estimates projecting a 0.2 percent increase. Personal income in April month-over-month rose 0.4 percent, besting forecasts of an uptick of 0.3 percent.
While in inflation, April Core PCE Price Index month-over-month was up 0.1 percent, off the 0.2 percent increase forecasted.
ISM manufacturing PMI in May was 52.8, above forecasts of 51.9, while April Construction spending month-over-month rose 2.2 percent, outpacing estimates of 0.7 percent increase.
Additionally, ISM manufacturing prices in May was 49.5, once again beating the consensus of 43. Final manufacturing PMI in May was 54, off the 54.2 forecast. Later this week will see the release of non-farm payrolls for May.
In the wider-markets, the dollar was 0.7 percent stronger at $1.0920 against the dollar, while the he Dow Jones industrial average and S&P were each up 0.4 percent.
Elsewhere, China’s manufacturing PMI was in line with the forecast at 50.2 although the country’s non-manufacturing PMI edged down to 53.2 from 53.4 last month. The HSBC final manufacturing PMI for May came in as expected at 49.2.
In European manufacturing PMIs today, the Spanish and Italian figures outperformed but the French and German readings undershot. The aggregated eurozone number of 52.2 missed the forecast 52.3.
As for the other precious metals, Comex silver for July delivery was unchanged at $16.700 per ounce. Trade has ranged from $16.590 to $17.170.
Platinum futures for July delivery were down $7.20 at $1,104.30 per ounce, while the most actively traded palladium contract was at $773.75, down $3.35.
(Editing by Tom Jennemann)
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