Hopes that a compromise between Greece and its European partners would eventually be reached dampened appetite for safe-haven assets sending gold to six-week lows on Wednesday.
On the Comex division of the New York Mercantile Exchange, Gold for April delivery shed 60 cents, or 0.05%, to trade at $1,208.20 a troy ounce during European morning hours. Prices held in a range between $1,206.00 and $1,210.50. Futures were likely to find support at $1,201.60, the low from January 6, and resistance at $1,236.70, the high from February 16.
Yesterday, gold dropped to $1,203.30, the lowest level since January 6, before settling at $1,208.60, down $18.50, or 1.51%.
Greek authorities intend to ask for a
six-month extension of its loan agreement with its international lenders
later in the day, easing concerns over the country's future in the euro
zone, according to sources.
The country's current €240 billion bailout is due to expire at the end of the month, fuelling worries the country will run out of money.
Ongoing expectations
for the Federal Reserve to start raising U.S. interest rates as early as
June also pressured gold prices.
Market players will eye Wednesday’s minutes of the latest Fed meeting for further indications on when the central bank may start to hike interest rates.
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.
Elsewhere on the Comex, silver for March delivery tacked on 2.7 cents, or 0.16%, to trade at $16.40 a troy ounce. On Tuesday, silver plunged 91.6 cents, or 5.3%, to close at $16.37.
In the meantime, copper for March delivery eased down 0.6 cents, or 0.24%, to trade at $2.575 a pound.
Chinese markets will be closed for a week from Wednesday for the Lunar New Year holiday, removing a key support for prices. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
