Gold prices were little changed on Tuesday, as investors focused on developments surrounding talks between Greece and its international creditors while speculating over the timing of a U.S. rate hike.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery inched up 10 cents, or 0.01%, to trade at $1,188.80 a troy ounce during European morning hours.
Prices held in a range between $1,186.60 and $1,190.50. A day earlier, gold jumped to $1,204.70, the strongest level since May 26, before turning lower to settle at $1,188.70, down $1.10, or 0.09%.
Futures were likely to find support at $1,180.20, the low from May 28, and resistance at $1,208.90, the high from May 26.
Greece’s creditors said late Monday that there must be “intensive work” in the coming days to reach an agreement on economic reforms needed to unlock further financial aid.
Greece is due to make a €305 million payment to the International Monetary Fund on Friday but warned last month that it will be unable to make the repayment if a cash-for-reforms deal is not reached by then.
Meanwhile, expectations that the Federal Reserve would raise interest rates after the summer grew following the release of upbeat data on U.S. manufacturing activity and construction spending on Monday.
The Institute of Supply Management’s manufacturing index accelerated in May, as new orders and employment both rebounded. The ISM index of manufacturing activity was 52.8, up from 51.5 in April and ahead of forecasts for 52.0.
Another report showed that U.S. construction spending rose to the highest level in six-and-a-half years in April, adding to recent signs that the economy is rebounding from a weak first quarter.
The Commerce Department said construction spending jumped 2.2% to an annual rate of $1.0 trillion, the highest since November 2008.
The greenback shrugged off data earlier in the day showing that U.S. consumer spending was unexpectedly flat in April.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased to 97.34, not far from the five week highs of 97.88 hit last Wednesday.
Also on the Comex, silver futures for July delivery tacked on 5.7 cents, or 0.34%, to trade at $16.73 a troy ounce. Silver shed 2.1 cents, or 0.13%, on Monday to end at $16.68 after hitting a daily peak of $17.17, a level not seen since May 26..
Elsewhere in metals trading, copper for July delivery advanced 1.5 cents, or 0.54%, to trade at $2.735 a pound. On Monday, prices slumped to $2.710, the lowest since April 24, before closing at $2.720, down 0.8 cents, or 0.29%.
A pair of mostly downbeat reports on China’s manufacturing sector on Monday underlined speculation policymakers will have to introduce further easing measures to jumpstart the economy amid lackluster growth.
Since November, the People’s Bank of China has introduced a series of stimulus measures, including lowering interest rates three times and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
In the currency market, the dollar rose to fresh 12-and-a-half year highs against the yen, amid speculation the Fed was on track to raise interest rates in September.