Gold inches down amid likely '15 Fed rate hike, optimism of a Greek deal

Gold futures ended the week roughly 0.5% lower near $1,160 an ounce

Investing.com -- Gold futures inched down in spite of a weaker dollar, as traders digested strong indications from Janet Yellen that the Federal Reserve will raise interest rates this year and markets throughout the euro zone moved broadly higher amid optimism of a Greek deal.

On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 1.00 or 0.09% to 1,158.20 an ounce. During Friday's session gold futures traded in a tight range between $1,156.80 and $1,163.00 an ounce, ending the week down approximately 0.5%.

In Athens, Greece prime minister Alexis Tsipras sought support from members of parliament for backing of a €53.5 billion austerity plan through the European Stability Mechanism (ESM). Tsipras' Syriza party submitted the proposal to Greece's troika of creditors from the European Central Bank (ECB), European Commission and International Monetary Fund on Thursday night.

"We are confronted with crucial decisions," Tsipras said. "We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not given a mandate to take Greece out of the euro zone.We are all in this together.”

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. On Saturday, the euro group of finance ministers will discuss the request by the Greek authorities for financial assistance from ESM, while the The European Commission, the ECB and IMF will present their assessment of risk to financial stability in the euro area, Greece’s financing needs and the sustainability of its public debt, the euro group said in a statement. If approved, the two sides could approve an agreement on Sunday in an emergency summit in Brussels.

Elsewhere, Yellen, the chair of the Federal Reserve said in a speech before the The City Club of Cleveland that the Fed is on track to raise interest rates at some point this year. The comments from Yellen are her most definitive to date on the timing of a 2015 rate hike. It has been nearly a decade since the U.S. Central Bank has raised its benchmark Federal Funds Rate.

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

Silver for September delivery gained 0.132 or 0.86% to 15.493 an ounce.

Copper for September delivery fell 0.013 or 0.52% to 2.538 a pound.