Gold prices edge higher in Asia as market eyes Greece debt talks

Investing.com - Gold prices edged higher in Asia on Wednesday as investors looked ahead to events surrounding Greece's debt bailout package.

Greece's left-wing government expressed confidence on Tuesday that parliament would approve a debt deal with lenders, despite an angry reaction from some of its own lawmakers, Reuters reported.

Concessions offered by Prime Minister Alexis Tsipras, including hikes to tax and pension contributions, garnered a cautious welcome from euro zone leaders but triggered a furious reaction from some leftists in the ruling Syriza party.

On the Comex division of the New York Mercantile Exchange, gold for August delivery frose 0.10% to $1,177.80 a troy ounce.

Silver for July delivery gained 0.36% to $15.793 a troy ounce.

Copper for July delivery eased 0.07% to $2.611 a pound, taking a breather after gains this week aided by hopes for China economic growth to pickup.

Overnight, gold futures fell slightly extending sharp losses from the previous session, as the dollar enjoyed its highest one-day gain in nearly a month amid continuing optimism regarding a deal in longstanding Greek Debt negotiations and a raft of mixed economic data.

On Tuesday morning, the U.S. Commerce Department said in a monthly report that new home sales surged by 2.2% in May to a seasonally-adjusted 546,000 reaching its highest level since February, 2008. The figures underscores resilience in the real estate market, one day after a monthly report indicated that existing home sales jumped more than 5% last month.

The Commerce Department also upwardly revised April's total by 27,000 to 534,000, representing a prodigious 8.1% gain. Separately, the Federal Housing Financing Agency's House Price Index ticked up 0.3% in April rising modestly for the second straight month. Meanwhile, the Richmond Fed Manufacturing Index gained five points in June bolstered by a surge in new orders.

Unexpected declines in Durable Goods Orders and a lower-than-expected reading of the PMI Manufacturing Index, however, weighed on the dollar.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

One day after European leaders expressed hope that a deal for a temporary Greek bailout could be reached later this week, leftist demonstrations in support of the Syriza government continued in Athens.

On Monday evening, European Commission president Jean-Claude Juncker said he was confident that the euro group can finalize the decision-making process later this week after Greece took major steps to meet the expectations of its troika of its creditors with its latest proposal submitted on Sunday. The proposal includes raising early retirement age provisions to 67 and imposing higher Value-Added Taxes.

Elsewhere, Federal Reserve Governor Jerome Powell took a hawkish stance on the timing of a highly-anticipated interest rate hike by the Fed, indicating that there is a 50/50 chance lift-off could occur at the FOMC's September meeting, followed potentially by another rate hike in December. Appearing on a panel discussing monetary policy in Washington, Powell said that while transient effects pulled down inflation in the first quarter, it could still reach the Fed's targeted goal of 2% by the end of 2015, as the dollar and oil prices stabilize.

Gold, which is not attached to dividends or interest rates, struggles to compete with high yield bearing assets in periods of rising interest rates.