Gold
futures fell for the third straight session, falling out of favor with
investors as attention shifts away from Greece and back to the outlook
for higher U.S. interest rates.
Federal
Reserve Governor Jerome Powell suggested Tuesday that rates may rise as
soon as September as the economy gains traction. Gold last week posted
the biggest advance in a month after Fed officials indicated that
monetary tightening will happen at a slow pace, while Greece faced an
impasse with its creditors.
The
metal’s rally is proving to be short lived. Mounting speculation that
Greece will soon reach a deal to avoid default is cutting demand for
haven assets. At the same time, signs of improving U.S. economic growth
are reigniting concern that the Fed will raise rates soon, boosting the
dollar. Higher rates curb gold’s allure because the commodity doesn’t
pay interest or give returns like other assets such as bonds and
equities.
Gold
futures for August delivery declined 0.6 percent to settle at $1,176.60
an ounce at 1:37 p.m. on the Comex in New York. The three-session slump
was longest since June 5.
Source: Bloomberg
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