Gold prices held near multi-month lows Thursday amid receding concerns over Greece's debt crisis and amid mounting expectations of a Fed rate hike later this year.
On Thursday gold futures for August delivery on the Comex division of the New York Mercantile Exchange shed $1.20, or 0.1%, to trade at $1,146.20 a troy ounce during European morning hours.
Comex silver futures for September delivery dropped 1.6 cents, or 0.11%, to trade at $15.03 a troy ounce.
A day earlier, gold tumbled to an eight-month low in the futures market and a four-month low in the cash market.
On Wednesday Fed Chair Janet Yellen said the central bank is on track to raise U.S. interest rates yet this year, amid improving U.S. economic growth and despite global worries that include the Greece debt crisis and a shaky Chinese stock market.
The news sent the greenback higher with U.S. Dollar index currently at 97.429, higher 0.27%.
Late Wednesday, Greece’s parliament supported the new debt plan that was agreed upon between Greece and creditors earlier this week. The plan was approved with 229 votes in the 300-seat chamber, despite dozens of hardliners in the ruling Syriza party opposing the package, raising doubts over the future of Prime Minister Alexis Tsipras' government.
The IMF is already questioning whether the cash-strapped country can uphold some of the economic reforms laid out in the agreement.
Ahead of the Greek vote on Wednesday night, the French national assembly voted overwhelmingly in favor of starting negotiations for the third bailout. Germany’s Bundestag is set to vote on the plan on Friday.
Later Thursday, the eurogroup of euro zone finance ministers were to discuss the latest developments in Greece. Policy-makers in Brussels were continuing efforts to assemble a €7 billion short-term financing package to keep Greece afloat until the new bailout can be finalized.
The European Central Bank, which is due to meet in Frankfurt later Thursday, was expected to raise Emergency Liquidity Assistance (ELA) to Greek banks, the first step toward allowing them to reopen after being shut for nearly three weeks.
Elsewhere, China got an upbeat report on its gross
domestic product Wednesday. Its second-quarter GDP came in at up 7%,
which was above expectations of a 6.8% rise. The better economic growth
did help spark a sell-off in China’s stock market, due to concerns
China’s central bank will not further ease its monetary policy.
Chinese investors are now nervous wondering if the recent government intervention to buoy equities will prove fleeting.
Among other news, the Bank of Canada trimmed its key interest rate
Wednesday, which was the second reduction of the year. The Canadian
dollar weakened against the U.S. dollar on the news. CAD/USD was last at 0.7734.
