Gold declined for the third time in four sessions as signs of easing tensions between Greece and its creditors reduced demand for the metal as a haven.
Euro-area finance ministers welcomed progress Greece has made on meeting terms of its bailout while demanding more work before funds can be released, according to two officials. Finance chiefs gathering in Brussels will issue a statement to endorse Greece’s work on a plan to mend its economy, the officials said. Speculation that an aid deal would remain elusive boosted bullion earlier Monday.
Last week, gold rallied on mounting concern that Greece will stumble in its bid to avoid default. Prices also rose last week after a report showing limited wage gains amid increased U.S. hiring indicated the Federal Reserve can take its time in raising interest rates. Higher rates curb gold’s appeal because the metal generally offers returns only through price gains.
The endorsement from the finance ministers “means the EU is in favor of helping out Greece,” Phil Streible, a senior market strategist for RJO Futures in Chicago, said in a telephone interview. “It looks like the chances of a Greek default or exit of the euro is declining. When they have statements like that, you’re going to see the need for gold isn’t there.”
Gold futures for June delivery slid 0.5 percent to settle at $1,183 an ounce at 1:48 p.m. on the Comex in New York. The metal climbed 1.2 percent last week.
The U.S. payrolls report Friday showed average hourly earnings rising 0.1 percent in April after a revised 0.2 percent March gain that was weaker than initially reported. The median forecast in a Bloomberg survey projected a 0.2 percent increase for last month.
On Friday, holdings in exchange-traded products backed by bullion dropped 10.1 metric tons, the most since Oct. 8, according to data compiled by Bloomberg. Assets now total 1,615.1 tons, the least since mid-January.
Silver futures for July delivery fell 0.9 percent to $16.314 an ounce on the Comex.
Platinum futures for July delivery dropped 1.4 percent to $1,127.30 an ounce at the New York Mercantile Exchange. Palladium futures for June delivery dropped 2.7 percent to $780.45 an ounce, the biggest decline in six weeks.