Gold futures slipped for a third straight session to end at a more than three-month low on Thursday, on continued hopes for a deal in the Greek financial crisis. Nevertheless, the precious metal pared some of the losses after the dollar weakened on some disappointing economic data from the U.S. with a weaker than expected job growth in June and a more than anticipated increase in initial claims for U.S. unemployment benefits last week. The non-farm payrolls figure rose by 223K last month, slightly below the 230K that the Street was expecting. Prior month revisions showed job losses of a combined 60K jobs. The unemployment rate still dropped to a seven-year low. Meanwhile, a separate report from the Labor Department also showed an unexpected increase in initial jobless claims in the week ended June 27.
Gold for August delivery, the most actively traded contract, dropped $5.80 or 0.5 percent, to settle at $1,163.50 an ounce the lowest since March 18. Gold for August delivery scaled an intraday high of $1,168.20 and a low of $1,155.80 an ounce. On Wednesday, gold prices dropped $2.50 or 0.2 percent, to settle at $1,169.30 an ounce, on some upbeat private sector employment data for June even with a strong dollar. The decline was limited in anticipation of a last-minute deal to rescue Greece from the brink of fiscal disaster. For the week, gold future shed about 0.8 percent.
Gold prices have been hamstrung by the prospect of higher U.S. interest rates this year, which would increase the opportunity cost of holding the metal. The focus in the Greek crisis is on Sunday's referendum. Prime Minister Alexis Tsipras has urged Greeks to reject an international bailout deal, wrecking any prospect of repairing relations with European Union partners before a referendum that could decide Greece's future in Europe. There is scope for the Greek crisis to drive more risk-averse money into gold if it worsens to the point where Greece leaves the euro zone, or if there is contagion in other economies in the bloc, such as Italy, Portugal or Spain..
