Gold futures ended lower for a second straight session on Thursday, after U.S. Federal Reserve Chief Janet Yellen stressed there will be an interest hike this year, with investors preferring the riskier equity assets with global bourses on the rise. The down-tick in gold prices come despite the dollar trending lower against some major currencies .For the week, gold futures shed about 0.5 percent. Gold for August delivery, the most actively traded contract, dropped $1.30 to settle at $1,157.90 an ounce on Friday. Gold for August delivery scaled an intraday high of $1,164.50 and a low of $1,156.40 an ounce. On Thursday, gold prices dropped $4.30 or 0.4 percent, to settle at $1,159.20 an ounce, with investors opting for riskier equity assets and global markets rebounding following a massive sell-off a day earlier.
Speaking at the City Club of Cleveland on Friday, Janet Yellen said the economy showed signs of improving and expects to introduce a rate hike this year. She stressed the momentum of the U.S. economy is good with job gains leading to stronger consumer spending and consequently more employment and wage gains. Investors also kept a close watch on developments in Europe, where efforts are on for a last-ditch effort to keep Greece in their monetary union. Greece has threatened to go it alone unless they receive less punitive terms for bailout funds that will help the nation avoid a default on its sovereign debt. Both Greece and its creditors have been digging in their heels, although reports indicate a deal may be on the cards today. Greek Prime Minister Alexis Tsipras is seeking the backing of his parliament for a EUR 13 billion austerity plan under the European Stability Mechanism. Greece had submitted the proposal to its international creditors Thursday night. While addressing parliament on Friday evening, Greece finance minister Euclid Tsakalatos outlined a proposal which includes an ESM-ECB debt swap, significant fiscal and investment reforms and further debt relief as part of the program.
Holdings of SPDR Gold Shares (ARCA:GLD), the world's largest gold-backed exchange-traded fund, edged lower to 707.55 tons on Friday, from its previous close of 709.37 tons on Thursday. Physical demand remained tepid this week as prospective investors in China chased bargains in equities after a market rout, while those in India delayed purchases. The metal in India was still sold at a discount to the global benchmark.
