On Monday gold prices plunged to the lowest level of the session after data indicated that existing home sales in the U.S. rose to the highest level in May since November 2009.
Comex gold futures
for August delivery dropped $19.30, or 1.61%, to trade at $1,182.60 a troy ounce
during U.S. morning hours.
The National Association of Realtors said that last month existing home sales added 5.1% to 5.35 million units from 5.09 million in April. Meanwhile, analysts had expected existing home sales to rise 4.4% to 5.26 million units in May.
The sound data drove optimism over the health of the economy and brought the U.S. interest rate hike back into investors' attention.
Expectations of higher borrowing rates going up are counted as bearish for gold, as the yellow metal struggles to rival with yield-bearing assets when rates are on the rise.
In the meantime, tensions are rising around Greece.
The Eurogroup has issued a brief statement, which reads as follows:
"The Eurogroup broadly welcomed a new version of the reform plan submitted by the Greek authorities this morning, before the Eurogroup meeting, and considered it to be a positive step in the process.
The Eurogroup asked the institutions (the European Commission, the
European Central Bank and the International Monetary Fund) to start
analysing the new proposal and together with the Greek authorities work
out a list of prior actions with a view to reaching a final agreement on
the reform plan later this week.
The Eurogroup might hold another meeting this week."
the Financial Times's reporter Peter Spiegel said that the governments' heads now discuss a possibility of imposing capital controls in Greece.
