Wall Street Journal reports that the gold price is slipping.
“We are a few days, or I could even say a few hours, away from a resolution,” French President François Hollande said at a conference in Paris.
“Some people are just getting out of this market to avoid the volatility and paring back positions until they get a clearer understanding,” said Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago. “Just because Greece gets a deal now doesn’t mean that their problems are solved.”
“The stock market is still up and strong and siphoning money away from gold to stocks,” said George Gero, a senior vice president with RBC Capital Markets Global Futures.
“Fund managers will move money to wherever there’s better performance,” Mr. Gero said.
“If (Friday’s) jobs data do miss, it will be supportive of gold because of how much this market is hinging on the Fed decision,” Mr. Haberkorn said.
“The easing of tensions in the euro zone, with optimism around a Greek deal and Draghi’s comments, has lifted the stock markets today, dampening interest for safer assets like gold,” ActivTrades chief analyst Carlo Alberto de Casa said.
“But a more decisive move for gold could come from the U.S. data front on Friday.”
“I still believe gold will go lower in coming months, but at the moment there is not enough momentum to push the market in that direction, because of patchy US economic data and dollar moves,” ABN Amro analyst Georgette Boele said.
“If you have a consistent set of stronger data, you will get that move lower.”
The likelihood of higher interest rates in the U.S. has been a concern for investors in gold, which doesn’t pay interest or dividends and costs money to hold. But gold buyers say those worries are receding as U.S. economic growth continues to disappoint. This has led investors to shift their expectations away from rapidly tighter U.S. monetary policy toward only modest rate increases. Gold should remain competitive with interest-bearing assets in this environment, and could rally if inflation pressures resurface, these traders say.