June 23, 2015
Greek optimism curbs demand for gold as equities gain
(Reuters)- Gold was pressured by sharp overnight losses on Tuesday as its safe-haven appeal was diminished by increasing hopes that Greece would reach a deal with its creditors to avoid a default.
Strength in U.S. equities also curbed demand for the precious metal.
* Spot gold XAU= was little changed at $1,185.65 an ounce by 0009 GMT, after losing 1.3 percent on Monday.
* Bullion, often seen as an alternative investment during times of financial and economic uncertainties, had seen modest support in the last few days as Greece struggled to strike a deal with its international creditors to avoid a default that could have seen it exit the euro zone.
* But Greece took a step back from the abyss on Monday with the presentation of new budget proposals that euro zone leaders welcomed as a basis for a possible agreement in the coming days to unlock frozen aid and avert a looming default.
* European Council President Donald Tusk, who chaired an emergency summit of leaders of the 19-nation currency bloc, called the Greek proposals "a positive step forward". He said the aim was to have the Eurogroup finance ministers approve a cash-for-reform package on Wednesday evening and put it to euro zone leaders for final endorsement on Thursday morning.
* Wall Street marked solid gains on Monday, with the Nasdaq Composite closing at a record high.
* Strong U.S. economic data on Monday also added to the pressure on gold as investors feared it could prompt the Federal Reserve to raise interest rates soon. Gold is a non-interest-paying asset.
* U.S. home resales surged to a 5-1/2-year high in May as first-time buyers stepped into the market, the latest indication that housing and overall economic activity were gathering steam in the second quarter.
* Meanwhile, SPDR Gold Trust, the top gold-backed exchange-traded fund, said its holdings rose 0.51 percent to 705.48 tonnes on Monday, the first increase since May 26. But total assets at the fund are still near their lowest since September 2008.
* Wage talks between South African bullion producers and unions started on Monday, with both sides far apart, setting the stage for protracted wrangling in the ailing industry.