Gold regained ground on Thursday after hitting five-week low on Wednesday, as negotiations between Greece and European Union officials failed to progress on a way forward to allow Athens to get a needed funding
program in place before the end of the month.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery tacked on $7.50, or 0.61%, to trade at $1,227.10 a troy ounce during European morning hours. Prices held in a range between $1,216.60 and $1,232.70.
Yesterday, gold hit $1,216.50, the lowest level since January 9, before settling at $1,219.60, down $12.60, or 1.02%, as a broadly stronger U.S. dollar weighed. Futures were likely to find support at $1,208.70, the low from January 9, and resistance at $1,238.70, the high from February 11.
Market sentiment remained fragile after talks between Greece and
EU partners ended without an agreement, though both sides
said there was still hope for a deal. Further talks are expected to be held on Monday.
Greece's authorities have proposed an overhaul of 30% of its massive bailout deal, replacing it with a 10 point plan of economic reforms, but the creditors insist Greece must stick to the original agreement. Country's current bailout is due to expire on February 28 and the new Greek government does not want it extended, driving fears over a confrontation which could trigger the country’s exit from the euro zone.
In the meantime, expectations for the Federal Reserve to start raising interest rates by mid-2015 trimmed gains. Prices have been under pressure in recent sessions amid the growing possibility of an earlier Fed rate hike, following last week's robust U.S. jobs report, which saw market players bring forward expectations for the first rate increase to June.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Later in the day, the U.S. was to produce its weekly report on initial jobless claims in addition to data on retail sales.
Also on the Comex, silver futures for March delivery picked up 12.7 cents, or 0.76%, to trade at $16.88 a troy ounce. Silver slumped 11.2 cents, or 0.66%, on Wednesday to end at $16.76.
Copper for March delivery rose 1.2 cents, or 0.48%, to trade at $2.553 a pound.
Prices of the red metal remained underpinned amid speculation of further monetary easing from the People's Bank of China, following a recent series of disappointing economic data. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
