On Thursday, Gold futures dropped by nearly 1% amid reports that a deal was imminent between Greece and its creditors.
Added to this, the IMF (International Monetary Fund) also advised the U.S. Federal Reserve, headed by Janet Yellen, to delay the interest rate hike until 2016.
Gold for August delivery dropped more than 0.8% to trade at 1,172.50 on the Comex division of the NYMEX, before regaining slightly to trade at 1175.00, down $9.90, in the U.S. afternoon trading session. This marked the biggest drop for the precious yellow metal since the 19th of March.
Meanwhile, after a meeting with Jean-Claude Juncker, the European Commission president, Alexis Tsipras, Greece’s prime minister, appeared optimistic on striking a deal that is expected to release critical aid to the debt-ridden country. Also, in attendance was the president of the Eurogroup of finance ministers, Jeroen Dijsselbloem.
The European Commission emphasized that no deal was made although it indicated that "progress was made in understanding each other's positions". The two sides are expected to meet again in order to deliberate on the way forward before the Greece prime minister is expected to address the parliament on the progress of the talks in the evening.
Greece owes the International Monetary Fund 300 million Euros and the country is expected to repay 1.1 billion euros today. Tsipras had earlier indicated that Greece will delay this repayment until a deal is made.
Elsewhere, in its annual U.S. economy analysis, the IMF suggested that the Federal Reserve should shelf the increase in interest rates to the first half of 2016 and should only raise the rates this year if the inflationary growth and wage growth make notable positive strides.
MT4 Chart: Gold
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