Futures on gold declined lower USD 1500 on Monday amid fewer purchases with an aim to hedge against inflation. By the end of COMEX trades August futures on gold dropped by USD 4.50 (0.3%) and hit the mark of USD 1496.40 per ounce. It is the lowest closing rate since May 19.
Futures on gold and other metals decreased in the beginning of the week following France’s president Nicolas Sarkozy having approved the plan of French banks to prolong the terms of settling Greece’s obligations. It caused the euro to increase versus the US dollar.
Yet analysts of large banks note that futures on gold are unlikely to dip considerably, as there are still uncertainties over Greece’s default. Voting on measures of tough saving is to be held on Wednesday. These measures are necessary for providing further financial assistance to Athens by the EU and IMF.
Unclear situation with Greece helped large funds to boost long position on gold. In accordance with CFTC data, for June 14-21 net long positions on gold futures amounted to 206 300 which is the highest number for the last 9 weeks.
Meanwhile, July futures on silver dropped by USD 1.05 (3%) and equaled thus USD 33.59 per ounce.
Gold in its turn is still in a downtrend which followed the last week announcements of the IEA to supply 60 mln. barrels of oil to the market with an aim to cover the insufficient supplies from Lybia. It led to decrease in oil futures rates which alleviated inflation expectations and pushed the prices for gold down. Buying gold is often a means to hedge against inflation.
