Investing.com -- Gold futures fell slightly on Monday reversing the modest gains from last week, as continuing negotiations regarding the Greece debt crisis and additional stimulus measures in China remained in focus.
On the Comex division of the New York Mercantile Exchange, gold for June delivery dropped 4.60 or 0.39% to 1,184.30 a troy ounce. Gold traded between a low of 1,178 and a high of 1,189 on a thinly traded session to open the week.
Gold futures remained relatively unchanged in overnight trading after the People's Bank of China cut its benchmark interest rate over the weekend by a quarter percentage from 5.35% to 5.10% in an effort to spur economic activity and boost growth. GDP growth in China during the first quarter slumped to 7%, its lowest level since 2009. The cut marked the third in less than six months that Chinese officials slashed rates, providing an indication that China is becoming more aggressive in boosting the economy in the face of greater deflationary risk.
China also cut its one-year lending rate by 0.25% and its one-year deposit rate to 2.25%, raising its deposit-rate ceiling. China is the world's largest producer of gold and world's second-largest consumer of the precious metal. In Europe, Greece government officials confirmed on Monday afternoon that it has executed an order for a €750 payment to the International Monetary Fund due on Tuesday. Euro group officials in Brussels issued a brief statement on Monday on the latest developments in negotiations with Greece. While officials appeared pleased with the acceleration in the talks, they emphasized that "more time and effort is needed to bridge the gaps," in order to avoid a Greek default, Reuters reported. The sides reportedly remain at odds on critical measures deemed necessary to unlock critical aid to Greece such as pension and labor market reforms.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, inched up 0.23% to 95.12. Last Wednesday, the index fell to an 11-week low at 93.95 amid uncertainty on the timing of an interest rate hike by the Federal Reserve.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Elsewhere, silver for July delivery fell 0.152 or 0.92% to 16.313 a troy ounce.
Copper for July delivery dropped 0.012 or 0.43% to 2.908 a pound.