Gold prices dropped below level of $ 1.200 on Monday to trade at its lowest level in seven weeks after EU finance ministers of the Eurozone approved the extension of € 240 billion bailout of Greece by four months, whereas the absence of the largest consumers of China also took a toll.
On the Comex, US gold futures for April delivery was reached a session low of $ 1190.70 per troy ounce.
Spot gold changed little over $ 1,201.98 an ounce, after falling to $ 1197.95 in the previous session.
EU finance ministers had come to a deal on Friday to extend financial rescue heavily indebted Greece for four months, officials on both sides said.
Athens and its lenders to rescue the Eurozone agreed a deal at the last minute to extend the € 172bn bailout program the country for four months, ending weeks of uncertainty which threatened to unleash a Greek bank run and bankrupt the country.
The agreement, reached at a meeting to make or break EU finance ministers of the Eurozone on Friday night, undecided leaves several important issues – everything that reform measures Athens must take in order to get € 7.2bn in aid which completes the current program.
The dollar index rose on Monday, affecting the appeal of gold as a hedge and make more expensive for holders of other currencies metal.
The dollar has been strong over recent months on expectations that the Federal Reserve would soon raise rates on the back of a severe economic recovery in the United States.
Indian rupee wiped out most of the gains Monday morning and was trading slightly higher, tracking losses in local securities markets.
Gold prices declined in the futures market today amid weak global trend. At the Multi Commodity Exchange, gold for delivery in May was reduced by Rs 79, or 0.30 percent, at 26,377 rupees per 10 grams.
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