Gold futures struggle for direction amid Greece uncertainty

Investing.com - Gold prices swung between small gains and losses on Monday, as investors nervously eyed developments in Greece after the country overwhelmingly rejected conditions for a bailout package from creditors in a referendum on Sunday.

The result of the referendum has added to doubts over Greece’s future in the euro zone and deepened a standoff with its lenders.

European officials have indicated that they will only continue to finance Greece in return for far-reaching economic reforms.

Greek Prime Minister Alexis Tsipras welcomed the outcome of the vote and said Athens was returning to negotiations with the express goal of reopening banks, which have been shut for over a week after capital controls were imposed.

Without more emergency funding from the European Central Bank, Greece's banks are facing a cash crunch within days.

The ECB was to discuss whether to maintain emergency funding for Greek banks at their current restricted level later Monday.

Euro zone leaders were expected to hold a conference on Tuesday night to discuss the aftermath of the Greek referendum.

In a surprise move, Greek Finance Minister Yanis Varoufakis resigned on Monday, despite the referendum results.

In a statement, Varoufakis said his decision was prompted in part by “some European participants” expressing a desire for his part in any further negotiations to end.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange shed $1.10, or 0.09%, to trade at $1,166.70 a troy ounce during European morning hours. Futures were likely to find support at $1,155.80, the low from July 2, and resistance at $1,180.00, the high from June 30.

Uncertainty over Greece has so far failed to spur increased investor demand for gold, often perceived as a safe-haven asset.

European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked amid mounting fears that Greece would become the first country to exit the euro zone.

The euro was down 0.45% to 1.1060, after hitting a session low of 1.0970. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.1% to 96.47, boosted by the weaker euro.

Also on the Comex, silver futures for September delivery declined 8.5 cents, or 0.54%, to trade at $15.57 a troy ounce, while copper for September delivery tumbled 7.7 cents, or 2.94%, to trade at $2.540 a pound.