On Tuesday gold was steady in rangebound trading, as market players watched gains in global bond yields while eyeing developments in Greece's debt negotiations.
On the Comex division of the New York Mercantile Exchange, gold futures
for June delivery shed 30 cents, or 0.03%, to trade at $1,182.70 a troy
ounce during European morning hours. Futures held in a tight range
between $1,179.90 and $1,184.00.
Yesterday gold dropped $5.90, or 0.5%, to close at $1,183.00. Prices were likely to find support at $1,168.40, the low from May 1, and resistance at $1,199.30, the high from May 5.
Also on the Comex, silver futures for July delivery dipped 7.4 cents, or 0.45%, to trade at $16.24 a troy ounce. On Monday, silver slumped 15.1 cents, or 0.92%, to end at $16.31.
A renewed selloff in global government bond prices weighed on gold. Early on Tuesday, Germany's 10-Year bond yield spiked 6.0 basis points, or 10.02%, to hit 0.659%. Higher bond yields dampen gold's appeal as the precious metal does not pay any interest.
Euro zone bond yields have been rising in recent sessions as deflation fears have eased amid recovering oil prices and following the introduction of the European Central Bank's massive quantitative easing program.
In the meantime, Greece repaid a €770 million loan installment to the International Monetary Fund early Tuesday, easing concerns that it was on the verge of default.
The U.S. dollar index was 0.2% lower to hit 94.92, moving off Monday's high of 95.33.
Market players looked ahead to Wednesday's U.S. retail sales report for April, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.
Recent economic reports have indicated that the economy has slowed since the start of the year, prompting many investors to push back expectations on the timing of an initial rate hike by the Fed.
Elsewhere in metals trading, copper
for July delivery climbed 1.1 cents, or 0.37%, to trade at $2.914 a
pound, amid expectations policymakers in China will have to introduce
further stimulus measures to bolster the economy amid poor growth.
The People's Bank of China on Sunday cut its benchmark interest rate by a quarter percentage point to 5.10% from 5.35%, in order to spur economic activity and boost growth. It was the third rate cut in six months, which signaled that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise.
