Gold hits three-week lows as U.S. GDP data boosts dollar; Meeting on Greece in focus

On Wednesday gold touched three-week lows in early U.S. trade, after data showed that U.S. dross domestic product contracted at an annual rate of 0.2%.

August Comex gold was last down $3.90 at $1,172.70 an ounce. July Comex silver was last up $0.063 at $15.80 an ounce.

The U.S. Commerce Department said gross domestic product contracted at an annual rate of 0.2% in first three months of 2015, matching expectations and compared to a previous estimate of a 0.7% contraction.

Consumer spending rose 2.1% in the three months ended March 31, slightly above expectations for a 1.9% gain, and compared to an initial estimate of a 1.8% increase. Consumer spending typically accounts for nearly 70% of U.S. economic growth.

This week markets are mainly focused on Greece, the destiny of which is being determined at an emergency meeting in Brussels on Wednesday, as the parties seek to finalize debt-restructuring in order to unfreeze a new bailout package.

According to the recent reports, the sides are still far from reaching any constructive deal, although earlier, European officials expressed views that the proposal drafter by Athens over the weekend was a good basis for further negotiations.

The Wall Street Journal said earlier its reporters have seen a document that points out “stark divisions” still exist between Greece and its creditors.

The Guardian meanwhile reported that the five-page counter-proposal made by Greece’s creditors leaked - in several places. Athens has been pushed to raise more from VAT and also make sweeping changes to its pensions system, including raising the retirement age faster and eliminating benefits for the poorest pensioners.

Greece’s present arrangement with its creditors expires on June 30 - at which time Greece could run out of cash and be in default on its IMF/EU loans. A summit of EU leaders is scheduled for Thursday and Friday.

The cash-strapped country has to repay € 1.6 billion to the IMF by Tuesday, June 30, or face defaulting, which could trigger the country’s exit from the euro area.