Gold rises Tuesday with Greece, U.S. rate liftoff in focus; Dollar index retreats

Gold prices are posting decent gains and regained ground to hit the key $1.200.00 level in morning trading Monday, after trading below unchanged in earlier dealings.

August Comex gold futures were last up $11.10 an ounce at $1,201.30.

The U.S. dollar index has retreated from solid gains seen in overnight trading with the yellow metal seeing a good short-covering and bargain-hunting bounce.

The dollar entered the North American session on uneven footing, declining against the Japanese yen and several commodity-dependent currencies, including the Canadian dollar, while strengthening against the euro and the British pound, says MarketWatch.

The ICE U.S. dollar index measuring the dollar’s strength against a basket of six currencies mostly comprising the euro, was up 0.1% to 95.3840.

There are presently rumors swirling in the market place that Greece and its IMF/EU creditors have reached a debt-restructuring deal, which were not confirmed, however, but pressured the greenback.

Greece submitted new proposals for economic reforms to the European Commission on Tuesday, spurring hopes for a breakthrough that could unlock new funding before the country runs out of cash. 

Earlier, Alexis Tsipras said that reaching a deal with creditors would require the IMF, ECB and EC to ease their demands on pension reforms, and other proposals which would push Greece deeper into recession.

Speculation that the Federal Reserve could raise rates as early as September weighed on the yellow metal limiting its gains.