Gold slipped on Monday to trade near its lowest in seven weeks as Eurogroup officials reached an agreement on Greeces debt, curbing safe-haven demand for the yellow metal.
Comex gold for delivery in April lost 0.20% to $1 202.5 per troy ounce by 07:50 GMT, having shifted in a daily range of $1 204.7-$1 200.6 an ounce. The precious metal slipped 0.22% during the previous session to settle at $1 204.9.
European finance ministers agreed on Friday to extend Greeces current bailout deal by four months. However, the regions most indebted country needs to prepare a list of political measures, which would have to get the approval of the European Commission, the European Central Bank and the International Monetary Fund. Europes finance ministers are set to review the proposals on Tuesday.
The yellow metal performed well during the first month of the year, but last Friday it marked its fourth week of declines, cutting its gains to around 1.5% so far in 2015.
Meanwhile, the precious metal is also lacking the support of the worlds second-largest gold consumer. Chinas markets closed on Wednesday as the country celebrates its one-week long Lunar New Year holiday.
“With China temporarily out of the market and apparent progress on the Greek bailout, the path of least resistance appears lower for gold,” said HSBC analyst James Steel, cited by CNBC.
Additionally, speculators reduced their net long positions in gold futures and options for a third consecutive week in the seven days ended February 17, according to a report issued by the US Commodity Futures Trading Commission on Friday.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETF, climbed 1.79 tons on Friday to 771.25 tons.
Attention is now shifting towards Federal Reserve Chair Janet Yellens testimony before the Senate Banking Committee on Tuesday and the White House on Wednesday.
Gold traders are likely to be looking for clues on when the Fed will initiate its first interest rate hike since 2006, after last weeks release of minutes showed that many policy makers are still worried about low inflation and the impact of an interest rate increase on growth.
The US dollar index for settlement in March was up 0.30% at 94.625 at 07:53 GMT, holding in a daily range of 94.660-94.380. The US currency gauge fell 0.16% on Friday and closed at 94.340. A stronger greenback makes dollar-denominated commodities pricier for holders of foreign currencies and curbs their appeal as an alternative investment.
Pivot Points
According to Binary Tribune’s daily analysis, April gold’s central pivot point on the Comex stands at $1 207.0. If the contract breaks its first resistance level at $1 198.7, next barrier will be at $1 199.7. In case the second key resistance is broken, the precious metal may attempt to advance to $1 191.4.
If the contract manages to breach the S1 level at $1 206.0, it will next see support at $1 214.3. With this second key support broken, movement to the downside may extend to $1 213.3.
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