Investing.com -- Gold inched up on Friday amid a stronger dollar and renewed optimism for a Greek bailout deal to halt a lengthy six-session losing streak.
On the Comex division of the New York Mercantile Exchange, gold for August delivery gained 2.20 or 0.19% to 1.174.00. Gold traded in a tight range of 1,168.10 and 1,177.90 on Friday, ending the week down more than $20 an ounce. Since peaking above $1,205 on June 18, gold is down more than 2.5%.
Following two days of intense, high-level talks in Brussels, Greece prime minister Alexis Tsipras was scheduled to return to Athens on Friday to discuss a revised proposal with members of his cabinet and parliament. The new proposal from Athens’ international creditors includes the release of €15.5 billion of frozen aid in four installments, a package that could allow Greece to meet its debt obligations to the International Monetary Fund and the European Central Bank through November. In exchange, the proposal requires Greece to enact significant pension and tax reforms that the cash-strapped nation has resisted for months. European Commissioner president Jean-Claude Juncker and Tsipras met well into Thursday evening in an effort to hash out the critical issues.
The euro group of finance ministers is set to meet again on Saturday afternoon, where Greece will be asked whether it will accept a revised deal from its troika of creditors from the IMF, ECB and European Commission. If Athens declines the proposal, the group will then concentrate its efforts on limiting the consequences of a Greek default on its sovereign debt.
Gold is viewed as a safe haven for investors in periods of severe economic instability.
On Tuesday, the final €7.2 billion of a €240 bailout to Greece will expire if the two sides cannot reach a deal. Greece is also facing a deadline on Tuesday to meet a bundled €1.5 billion loan repayment to the IMF stemming from a separate bailout program in 2010. It is unlikely Greece will be able to make the payment without a last-minute deal.
In the U.S., the University of Michigan Consumer Sentiment Index surged to 96.1 for June, well above the high end of analysts’ forecasts for a reading of 95.2. The 13.1 gain since a reading from late-March represents the survey’s highest monthly gain since March, 1991. It also comes one day after the U.S. Department of Commerce said consumer spending surged 0.9% on a monthly basis in May, bolstered by a 0.5% uptick in personal income.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.35% to an intraday high of 95.86 before falling slightly back in U.S. afternoon trading. On Monday, the dollar surged more than 1.15% to a two-week high at 95.89, amid increased expectations for a Greek deal.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for July delivery fell 0.055 or 0.35% to 15.753 an ounce.
Copper for July delivery gained 0.030 or 1.15% to 2.653 a pound.