Prices of gold futures rallied on Monday on safe-haven bids after Greece and its creditors not able to reach a deal to avoid defaults on debt payments, but a disappointing economic data wetted optimism over the strength of the economy and added to the uncertainty over the timing of a rate hike in the United States.
Gold futures for August delivery climbed 0.2 percent to $1,181.50 an ounce on the Comex. Whereas, Spot gold had edged up 0.3 per cent to $1,184.28 an ounce.
Traders said limited offerings a safe haven from the Greek crisis. The talks on the weekend a stalemate between Athens and its international creditors separated in failure. Greece being encountered towards a default on debt owed, which threatens its future in the euro zone.
Gold will typically in demand in times of political and financial uncertainty, but gains tend to be of short duration.
“Gold has attracted scant interest in safe haven – enough to stem the downside – and instead focused on the monetary policy,” Barclays analysts said in a note on Monday.
The Fed said industrial output declined 0.2% in May, disappointing expectations for a gain of 0.3% following a fall 0.5% in April.
The report came after the Federal Reserve Bank of New York said its overall index of terms of business slipped to -2.0 in June from a reading of 3.1 in May. Analysts had forecast the index to rise to 6.0 this month.
Gold merchants are now looking ahead to the entry level testimony on Wednesday to a clear signal on when he could start raising interest rates.
India’s gold import bill, estimated at $3 billion in May, is seen falling further this month, ahead of Gold prices fall as supply has become even easier, and Imported gold now is to get at a discount of Rs 10,000 per kg. Before that, Imported gold was found at a premium of Rs 25,000 per kg.
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