Gold slipped on Friday, extending losses and heading for a fourth weekly decline, amid expectations of a last-moment agreement between Greece and its creditors.
Comex gold for delivery in April lost 0.05% to $1 207.0 per troy ounce by 08:22 GMT, having shifted in a daily range of $1 209.6-$1 205.7 an ounce. The precious metal gained 0.62% during the previous session to settle at $1 207.6.
Greece’s largest creditor Germany declined on Thursday a request for a six-month extension of the bailout deal with Europes most indebted country, describing the offer as “not a substantial proposal for a solution” as it does not tie Greece to the terms of its present-day deal.
Greek funding will be cut at the end of the month, if an agreement is not reached. European officials are set to hold a yet another meeting on Friday in Brussels, looking for ways to design a deal that is agreeable from both sides. The rejection from Germany may force Greeces new government to lead the country out of the Eurozone.
However, the move from Europes paymaster is seen by some as strategical and aimed at applying additional pressure on Athens.
In line with its tendency to benefit from political turmoil, gold has gained some ground since negotiations began following the election of the Alexis Tsipras-led Syriza party in late January. However, a last-moment agreement is widely expected, potentially dragging prices down.
“The market appears to be dismissing the Greece impasse with little safe haven buying evident,” said ANZ analyst Victor Thianpiriya, cited by Reuters.
Meanwhile, a report issued from the Labor Department on Thursday showed that less than expected US citizens filed for initial unemployment benefits during the week ended February 14. The figure stood at 283 000, compared to projections of 293 000, outlining that the labor market is picking up pace.
The newly-released data dented expectations that the Federal Reserve will hold back on raising interest rates by June, following the release of minutes from the policy makers meeting on January 27-28th.
The recording showed that Fed officials are concerned that a sooner increase in borrowing costs could hurt the recovery of the US economy amid lower than targeted inflation and weakness in wages.
The US dollar index for settlement in March was up 0.15% at 94.635 at 08:22 GMT, holding in a daily range of 94.720-94.400. The US currency gauge gained 0.25% on Thursday and closed at 94.492. A stronger greenback makes dollar-denominated commodities pricier for holders of foreign currencies and curbs their appeal as an alternative investment.
Meanwhile, China celebrates its one-week long Lunar New Year holiday and its markets are closed for the period, reducing liquidity.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETF, climbed 1.5 tons on Thursday to 769.46 tons. Changes in holdings typically move gold prices in the same direction.
Pivot points
According to Binary Tribune’s daily analysis, April gold’s central pivot point on the Comex stands at $1 211.9. If the contract breaks its first resistance level at $1 218.6, next barrier will be at $1 229.6. In case the second key resistance is broken, the precious metal may attempt to advance to $1 236.3.
If the contract manages to breach the S1 level at $1 200.9, it will next see support at $1 194.2. With this second key support broken, movement to the downside may extend to $1 183.2.
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