Gold futures settled lower on a weaker dollar, uncertainty over Greece’s financial situation and wagers by traders that the weakness in the US economy would prompt the Federal Reserve to shelve plans for monetary tightening for longer.
Gold for August delivery traded $1 or 0.1% higher at $1,189 a troy ounce on the Comex division of the New York Mercantile Exchange. Though 1.2% lowers on the week, the US most active contract was set for a 0.7% monthly gain based on the most active contracts.
Gold for immediate delivery was 0.3% up at $1,190.70 a troy ounce to close may with a 0.6% growth.
The Commerce department that the US economy shrank by 0.7% in the first quarter of 2015 weighed down mainly by harsh weather and weak oil prices.
Though much lower than the 1% consensus estimate of analysts polled by the Wall, Street Journal, it was significantly higher than the earlier government estimate of 0.2% growth.
With economic growth stalled, traders expect the Federal Reserve to hold off raising the interest rates until there is enough evidence of economic stability.
A hike in the interest rates would be bearish for the demand commodities like gold which rely on price changes for profitability.
Also aiding the gold rally was a slight fall in the value of the dollar against foreign currencies on the weak economic data.
‘Unless we see the dollar start to fall, or unless we get some huge inkling of a drastically-delayed rate hike, I think gold will continue to held at bay,” Adam Koos, president of Libertas Wealth Management Group, told Market Watch.
“Of course, there are always the global, geopolitical risks, government debt, and other black swan events that could cause a stock market crash, and this would also send gold into a bull frenzy.”
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