Gold Ends Below $1200 On Greece Hopes

(RTTNews) - Gold futures ended lower for a second straight session on Monday, with the safe haven appeal of the precious metal dropping, even as investors opted for the riskier equity assets on easing concerns over Greece's financial woes. Hopes of an agreement with its international creditors brightened after some new proposals put forth by Athens were being considered by the Eurogroup to resolve its debt crisis.

Gold prices were also impacted with the dollar trending higher against some major currencies, unable to hold the $1200 mark amid hopes for a resolution to the Greek debt crisis.

Hopes of an agreement between Greece and its creditors later this week have greatly improved after Athens submitted a revised economic reform proposal early Monday. The Eurogroup has responded with optimism, suggesting that an end to a five-month long deadlock over releasing bailout aid to the cash-strapped country may be near.

Eurogroup President Jeroen Dijsselbloem Monday said the new proposals submitted by Greece were seen a 'positive step' in the path to reaching a deal with creditors and work will start immediately with the aim of reaching a final agreement later in the week.

Athens is meeting with its creditors in a last-ditch effort to reach a settlement and avoid default. Analysts say it is likely that the two side will come to some arrangement.

Greece is facing an unenviable task of repaying a bundled loan of Euro 1.5 billion to the International Monetary Fund on June 30.

Gold for August delivery, the most actively traded contract, dived $17.80 or 1.5 percent to settle at $1,184.10 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for August delivery scaled an intraday high of $1,200.80 and a low of $1,181.60 an ounce.

On Friday, gold prices slipped $0.10 to settle at $1,201.90 an ounce, over the Greek impasse and the dollar strengthening against the euro.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 701.90 tons on Monday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.29 on Monday, up from its previous close of 94.07 on Friday in late North American trade. The dollar scaled a high of 94.38 intraday and a low of 93.81.

The euro trended lower against the dollar at $1.1348 on Monday, as compared to its previous close of $1.1351 in North American trade late Friday. The euro scaled a high of $1.1411 intraday and a low of $1.1313.

On the economic front, existing home sales in the U.S. increased more than expected in May, with sales jumping to their highest level in nearly six years, a report from the National Association of Realtors showed Monday. Existing home sales in May surged 5.1 percent to an annual rate of 5.35 million from an upwardly revised 5.09 million in April. Economists expected sales to climb to an annual rate of 5.25 million from the 5.04 million originally reported for the previous month.

The Bank of Japan maintained its upbeat view on the economy saying the moderate recovery is expected to continue. In its monthly report on Monday, the BoJ said exports are expected to increase moderately, albeit with some fluctuations, mainly against the background of the recovery in overseas economies.