Gold struggles for direction with Greece, U.S. rate outlook in focus

Investing.com - Gold prices swung between small gains and losses on Monday, as investors focused on developments surrounding talks between Greece and its international creditors while speculating over the timing of a U.S. rate hike.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery inched up $1.00 cents, or 0.08%, to trade at $1,189.90 a troy ounce during U.S. morning hours. Futures held in a tight range between $1,183.20 and $1,190.90.

On Friday, gold rose $6.70, or 0.57%, to close at $1,188.90. Prices were likely to find support at $1,168.40, the low from May 1, and resistance at $1,199.30, the high from May 5.

Also on the Comex, silver futures for July delivery tacked on 5.2 cents, or 0.32%, to trade at $16.51 a troy ounce. Silver jumped 16.8 cents, or 1.03%, to end at $16.46.

Greece and the euro zone were to hold a fresh round of talks later Monday as Athens scrambles to reach an agreement on a package of economic reforms in order to access fresh bailout funds.

Ahead of the talks, Greece’s government indicated that it was still hopeful that progress would be made, but euro zone officials have indicated that too many issues still remain unresolved.

Greece was due to repay approximately €770 million to the International Monetary Fund on Tuesday.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% to hit 95.05 early on Monday.

The Labor Department reported Friday that the U.S. economy added 223,000 new jobs in April, just below expectations for jobs growth of 224,000. March’s figure was revised down to just 85,000 from a previously reported gain of 126,000.

The unemployment rate fell from 5.5% to a near seven-year low of 5.4% last month, broadly in line with forecasts.

The mixed data underlined speculation that the Federal Reserve may hold off raising interest rates in the immediate future. However, investors conceded that higher rates still remain on the horizon.

In the week ahead, investors will be focusing on Wednesday's U.S. retail sales report for April, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.

Elsewhere in metals trading, copper for July delivery shed 1.2 cents, or 0.42%, to trade at $2.908 a pound, as sentiment failed to get a boost despite China rolling out its third interest rate cut in six months.

On Sunday, the People's Bank of China cut its benchmark interest rate by a quarter percentage point to 5.10% from 5.35%, in order to spur economic activity and boost growth.

It was the third rate cut since November, indicating that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise.

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