Gold Climbs as Greece Fails to Clinch Deal; Fed Meet in Focus

Singapore(Sharemasterindia.com): Gold edged up on Monday as Greece and its creditors failed to strike a deal to avert a debt default, but gains were capped as traders waited for a Federal Reserve policy meeting later this week for clues on the outlook for U.S. interest rates.

Fundamentals

Spot gold had risen 0.1 per cent to $1,181.43 an ounce by 0039 GMT, after posting its first weekly gain in four weeks on Friday.

Bullion got some safe-have support from news over the weekend that talks on ending a deadlock between Greece and its international creditors broke up in failure on Sunday, with European leaders venting their frustration as Athens stumbled closer towards a debt default that threatens its future in the euro.


Gold is typically in demand during times of political and financial uncertainty, though gains are often short-lived.

Investors were waiting to hear from the U.S. central bank later this week on when it will make its first interest rate hike in nearly a decade.

The Fed will begin its two-day meeting on Tuesday, with a statement to be released on Wednesday afternoon.

A rate hike could diminish demand for non-interest-paying gold, while boosting the dollar.

Investor positioning showed the markets were cautious about gold's price outlook. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 703.98 tonnes on Friday, the lowest since 2008.

Hedge funds and money managers slashed their net long stance in gold during the week ended June 9, U.S. Commodity Futures Trading Commission data showed on Friday.

In mining news, Anglo American Platinum is considering floating its labour-intensive South African mines around Rustenburg rather than selling them because the offers it has received are too low, a company and banking source said on Friday.