Gold futures trade near 7-week low with Greece in focus

Investing.com - Gold held near the lowest level in seven weeks on Monday, as demand for safe haven assets weakened after euro zone finance ministers agreed on a deal to extend Greece’s bailout by four months on Friday.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery dipped $4.60, or 0.38%, to trade at $1,200.20 a troy ounce during European morning hours. Prices touched a seven-week low of $1,197.20 on February 18.

On Friday, gold shed $2.70, or 0.22%, to settle at $1,204.90. The precious metal lost $22.60, or 1.81%, last week, the fourth straight weekly decline.

Futures were likely to find support at $1,197.20, the low from February 18, and resistance at $1,222.90, the high from February 19.

Market sentiment strengthened on Friday after the euro zone approved the extension of Greece’s €240 billion bailout, removing concerns that the country would face a liquidity crunch when its current bailout agreement expired at the end of the month.

Athens has until later in the day to present a list of reforms to be approved by the country’s creditors in order to secure the bailout extension, which will give it more time to reach a lasting agreement with its creditors.

Meanwhile, the U.S. was to publish a report on existing home sales later Monday, as investors look for further hints on the strength of the economy and the future path of monetary policy.

Tuesday’s testimony by Federal Reserve Chair Janet Yellen to the Senate Banking Committee will also be closely watched for any indication on when U.S. interest rates may start to rise.

Gold has been under pressure in recent weeks amid ongoing expectations for the Federal Reserve to start raising interest rates later this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Elsewhere on the Comex, silver futures for March delivery declined 5.3 cents, or 0.32%, to trade at $16.26 a troy ounce. Prices hit $16.16 on Friday, the lowest level since January 6.

Meanwhile, copper for March delivery eased up 1.2 cents, or 0.47%, to trade at $2.603 a pound in holiday-thinned trade.

Markets in the world's biggest copper consumer, China, will remain closed until February 24 for the Lunar New Year holiday, removing a key support for prices.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.