The gold price dropped to a three-week low and European equity markets ticked higher on Friday afternoon on reports that Greece is edging closer to a bailout deal.
Spot gold was last at $1,170.40/1,172.20 per ounce, down $2.80 on Thursday’s close, having earlier hit $1,168.70.
Growing optimism that Greece will secure a deal with its creditors bolstered European stock markets, persuading investors to put their money in riskier assets.
The Euro Stoxx moved up 0.57 percent, the Dax 0.33 percent and the Cac-40 0.84 percent – all had been in negative territory. The euro was slightly weaker at 1.1180 against the dollar.
Eurozone finance ministers met yesterday in another attempt resolve the deadlock between Athens and its creditors but failed to reach an agreement. Still, there are reports that a cash-for-reform deal is on the table that would unlock the necessary funds for Greece to avoid an exit from the eurozone – for now, at least – after the gap between the two sides narrowed.
Talks will resume on Saturday; should Greece not have some kind of deal in place by Sunday night, the chances of a Grexit will increase exponentially.
In earlier data, the Tokyo core CPI at 0.1 percent was as expected as was the unemployment rate at 3.3 percent. Household spending increased to 4.8 percent, as did the national core CPI at 0.1 percent against consensus of 0 percent.
In Europe, German import prices fell short at -0.2 percent, as did M3 money supply at 5.0 percent. Still to come from the US are revised University of Michigan consumer sentiment and inflation expectations.
In other metals, silver was down 10 cents at $15.74/15.79 per ounce while platinum was $9 lower at $1,071/1,076. Palladium dropped further to $668/674, down $7 and its lowest in two years - it looks on track for a third consecutive day of declines.
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