Investing.com -- Gold futures inched down on Thursday extending a recent slump, amid strong U.S. consumption data and a lack of progress in Greek Debt negotiations.
On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.02% to 1,172.70 a troy ounce. The precious metal closed lower for the sixth consecutive session, continuing its trend downward since plunging more than 1.2% on Monday. Gold futures traded in a tight range on the session between 1,171.10 and 1,177.30.
On Thursday morning, the U.S. Department of Commerce said consumer spending surged in May by 0.9%, the highest monthly gain in nearly six years and above expectations for a 0.7% rise. Bolstered by a 0.5% spike in personal income, the surge reflects an increase in consumer spending in auto purchases and retail goods. Consumer spending accounts for approximately two-thirds of economic activity throughout the U.S.
At the same time, the Commerce Department said its PCE price index rose by 0.3% for the month in line with consensus estimates from analysts. The index is up by 0.2% on a year-over-year basis. The Core PCE price index, which strips out volatile food and energy prices, inched up 0.1% from April. Over the last 12 months, however, the index is up 1.2%.
The PCE index is the Federal Reserve's preferred measure for inflation. Last week, the Fed reiterated that it would like to see inflation move toward its long-term targeted goal of 2% before it institutes its first interest rate hike in more than a decade.
Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in higher rate environments.
Elsewhere, initial jobless claims remained near historic lows even as the level increased by 3,000 last week to 271,000. More critically, the four-week average fell by 3,250 to 273,750 moving lower from monthly averages throughout the spring.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, was relatively flat in U.S. afternoon trading at 95.38, down 0.07% for the session. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
In Brussels, the two sides in longstanding Greek Debt negotiations concluded talks on Thursday without reaching a deal. During the emergency two-day meeting, both sides presented revised proposals that could unlock critical stimulus aid to Greece thought to be necessary in order to avoid bankruptcy. The high-level talks included members of the European Central Bank, International Monetary Fund and European Commission.
The emergency negotiations could resume on Saturday, The Guardian reported.
“We shall continue our deliberations, the institutions are going to look again at the two documents - our documents and their own, there will be discussions with the Greek government, and we’ll continue until we find a solution,” Greece finance minister Yanis Varoufakis told reporters in Brussels.
Greece is running out of time before it owes the IMF a bundled payment of €1.5 billion on Tuesday.
Gold is viewed as a safe-haven for investors in periods of severe economic instability.
Silver for July delivery fell 0.03 or 0.19% to 15.823 an ounce.
Copper for July delivery dropped 0.005 or 0.18% to 2.62 a pound.