Gold fell to the lowest in seven weeks after Greece reached a provisional bailout deal with euro-area finance ministers, reducing demand for the metal as a haven. Platinum slid to the lowest since 2009.
Greece has until the end of Monday to complete a list of policies in return for a four-month extension of funds. European finance chiefs will then decide whether the proposals go far enough or trigger another round of negotiations. Gold, little changed this year, reached a five-month high in January partly as concerns that Greece could be forced out of Europe’s common currency increased the metal’s haven appeal.
U.S. Federal Reserve Chair Janet Yellen may use testimony to Congress this week to update the central bank’s view after policy makers signaled at their Jan. 27-28 meeting they are willing to keep interest rates low for longer given risks to the economy. Gold fell a second year in 2014, partly on the prospects for the Fed to raise borrowing costs.
“Clearly anything that is not a complete breakdown in Greece is being read as a negative for gold,” Matthew Turner, an analyst at Macquarie Group Ltd., said by phone in London on Monday. “But as long as there is no great shocks, the market focus will shift to Yellen’s testimony.”
Gold for April delivery fell as much as 1.2% to $1,190.60 an ounce, the lowest since Jan. 5, and was at $1,199.30 by 8:02 a.m. on the Comex in New York. Gold for immediate delivery lost 0.4% to $1,196.70.
Futures trading volume was 33% below the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Platinum for April delivery slipped 0.4% to $1,165 an ounce, after touching $1,155.50, the lowest since July 2009.
Gold’s ratio to platinum retreated from a two-year high set on Feb. 20 in London. Gold is 1.1% higher this year, while platinum has fallen 3.7%.
Money managers cut net-long wagers on gold by 18% in the week ended Feb. 17, the most in 15 weeks, U.S. government data show. It was the third consecutive decline, the longest streak since November. Short holdings surged 44%, the most since August.
Holdings in gold-backed exchange-traded products increased for a third session as of Feb. 20, climbing to 1,675.7 metric tons.
Silver for May delivery advanced 0.9% to $16.465 an ounce in New York. Palladium for June delivery added 0.3% to $782.90 an ounce.