Gold rises for 2nd day with Greece, U.S. rate hike outlook in focus

Investing.com – Gold prices rose for the second consecutive session on Tuesday, as uncertainty over the future of Greece and concerns surrounding the impact of an interest rate hike in the U.S. remained in focus.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery hit an intraday peak of $1,182.30, the most since June 5, before trading at $1,179.60 during U.S. morning hours, up $6.00, or 0.51%.

A day earlier, gold prices tacked on $5.50, or 0.47%, to close at $1,173.60. Prices slumped to an 11-week low of $1,162.10 on June 5.

Futures were likely to find support at $1,162.10, the low from June 5, and resistance at $1,186.60, the high from June 4.

Developments surrounding talks between Greece and its international creditors remained in focus. Athens submitted new proposals for economic reforms to the European Commission on Tuesday, fuelling hopes for a breakthrough that could unlock new funding before the country runs out of money.

Greek Prime Minister Alexis Tsipras said the two sides could reach a deal if Greece’s creditors dropped demands to cut pensions and other proposals which would push Greece deeper into recession.

German Chancellor Angela Merkel warned Monday that “there isn’t much time left” to reach an agreement on a cash-for-reforms deal.

Athens delayed a key debt payment to the International Monetary Fund on Friday and its current bailout program is due to expire at the end of this month.

Gold’s gains were limited amid speculation the Federal Reserve could raise interest rates as early as September.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 95.40, moving off overnight lows of 94.86.

Also on the Comex, silver futures for July delivery rose 4.9 cents, or 0.31%, to trade at $16.00 a troy ounce. Silver prices fell to $15.88 on Monday, the weakest level since April 30, before closing at $15.95, down 2.5 cents, or 0.16%.

Elsewhere in metals trading, copper for July delivery increased 2.8 cents, or 1.03%, to trade at $2.724 a pound after disappointing Chinese inflation data added to speculation policymakers will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.

The Asian nation is the world’s largest copper consumer, accounting for nearly 40% of global demand.