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PRECIOUS-Gold drops as focus shifts to possible U.S. rate hike
July 14, 2015 / 12:45 AM / in 2 years

PRECIOUS-Gold drops as focus shifts to possible U.S. rate hike

MANILA, July 14 (Reuters) - Gold stretched losses from the previous session on Tuesday as the dollar clung to gains on expectations the U.S. Federal Reserve is on course to increase interest rates this year.

Fed Chair Janet Yellen may provide more signals of a looming rate hike at her semiannual testimony to Congress on Wednesday and Thursday, shifting global focus back to the U.S. central bank from Greece which secured an 86-billion-euro bailout in exchange for tough reforms.

FUNDAMENTALS

* Spot gold was down 0.2 percent at $1,155.26 an ounce by 0035 GMT, after dropping as much as 1.1 percent on Monday.

* U.S. gold for August delivery was flat at $1,154.60 an ounce.

* Yellen said on Friday that the U.S. central bank was on course to raise interest rates within the year, the first hike in nearly a decade, though labor markets remained weak.

* In Greece, the terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Prime Minister Alexis Tsipras to abandon promises of ending austerity.

* Economic growth in top gold consumer China is forecast to be the weakest since the global financial crisis in the second quarter, which together with a stock market rout raises pressure on authorities to do more despite little payoff so far from a run of stimulus steps.

* A Reuters poll of 52 economists showed China’s annual GDP growth was expected at 6.9 percent in April-June. The data will be released on Wednesday.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.2 percent to 709.07 tonnes on Monday.

* For the top stories on metals and other news, click or

MARKET NEWS

* U.S. stock futures edged lower and the dollar gained versus the euro as investors waited to see if Greece’s conditional bailout agreement would bring to an end that country’s debt crisis.

DATA AHEAD (GMT)

0900 Germany ZEW economic sentiment July

0900 Euro zone Industrial production May

1000 U.S. NFIB business optimism June

1230 U.S. Import prices June

1230 U.S. Export prices June

1230 U.S. Retail sales June

1400 U.S. Business inventories May

Reporting by Manolo Serapio Jr.; Editing by Joseph Radford

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