Investing.com -- Gold futures edged down on Wednesday extending losses from a massive sell-off one session earlier, amid positive developments in negotiations between Greece and its creditors, as well as the continued appreciation of the dollar.
On the Comex division of the New York Mercantile Exchange, gold for August delivery fell mildly by 1.10 or 0.09% to 1,186.70. Gold traded in a narrow range of 1,184.10 and 1,191.00 on the second day of trading in the condensed week. The precious metal has now moved lower in five of the last six sessions and six of the last eight after reaching a three-month high of 1,232.80 on May 18.
A day earlier, gold futures plunged nearly $20 or 1.62% as the dollar posted its largest one-day gain in nearly two years.
In Brussels, Greek prime minister Alexis Tsipras said his nation is close to reaching an agreement with its troika of creditors deemed necessary to unlock critical aid that could allow it to stave off bankruptcy. The two sides have begun the process of drafting a technical level agreement on a comprehensive bailout package, according to Athens officials.
"We have made many steps, we are on the final stretch towards a positive deal," Tsipras told reporters.
A deal in the four-month stalemate could free up the remaining €7.2 billion of a 240 billion bailout euro zone creditors have provided to the cash-strapped Mediterranean nation. Greece is in desperate need of the stimulus package as it reportedly grows closer to running out of cash by the day. Before the deadline to reach an agreement expires at the end of June, Greece owes approximately €1.6 billion to the International Monetary Fund over several payments due next month.
Greek officials believe a deal can be reached without making concessions for pension and wage cuts, according to multiple reports. The austerity measures, however, were presumed to be a prerequisite for reaching any accord. Officials from the European Commission, meanwhile, painted a different picture on the developments of negotiations.
"We are working very intensively to ensure a staff-level agreement," European Commission vice president Valdis Dombrovskis told reporters. "We're still not there yet."
On Wednesday afternoon, shares on the Greek Stock Market soared at the prospects of a deal.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained 0.16% to 97.54, its highest level in a month. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for July delivery fell 0.078 or 0.47% to 16.668 an ounce.
Copper for July delivery dropped 0.010 or 0.37% to 2.768 a pound.