Gold Futures End Lower For Third Straight Week


Gold Futures End Lower For Third Straight Week

Gold futures ended moderately lower on a rally by US equities and comments by the Federal Reserve Chairwoman Janet Yellen but ended significantly lower on the week for the third straight week.

Gold futures for august delivery slipped $1.34 or 0.1% to settle at $1,157 a troy ounce on the Comex division of the New York Mercantile Exchange.

Based on the most active contracts, the most active US contract ended the week 0.5% lower for the week and more than 1.1% for the month to date.

“Everyone expects gold demand in Asia to rise…” Chintan Karnani, chief market analyst at Insignia Consultants, told Market Watch.

“In case Asian gold demand turns out to be a snub in the next two weeks, then gold could see another wave of selling.”

Federal Reserve Chairwoman Janet Yellen said Friday that she saw signs that the economy was improving and expected the Fed to hike the interest rates by the end of the year.

Higher interest rates are bearish for the demand of non-interest bearing commodities like gold which rely on price changes for profitability.

Gold prices however found support in a weaker dollar against the Euro after the Euro gained on optimism of a deal between Greece and its international lenders being reached.

A weaker greenback increases the demand of commodities like gold that are denominated in dollars as it makes them cheaper to holders of other currencies.

Also dulling gold demand was progress in the talks between Greece and its lenders after the country submitted its proposals with significant concessions ahead of the EU ministers’ meeting later on Friday.

A potential agreement on the bailout deal reduced the need for a haven commodity and strengthened equities in the US drawing attention away from gold.

“There’s no rotation of funds simply because there’s no funds to rotate. You have all your money locked up in stock that has halted trading, so I don’t think you’ll be looking to buy gold anytime soon,” Howie Lee, analyst at Phillip Securities in Singapore, told Reuters.

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