Gold Ends Below $1,170 On Strong Dollar, Upbeat Data

(RTTNews) - Gold futures slipped for a second straight session to end at a near four-week low Wednesday, on some upbeat private sector employment data for June even as the dollar strengthened against a basket of select currencies. But the loss was somewhat capped as the world watched for a last-minute deal to rescue Greece from the brink of fiscal disaster.

Reports indicate the Greek Prime Minister Alexis Tsipras has sent a letter stating he will accept demands made by the country's creditors over the weekend with only a handful of minor changes. The two-page communique was sent to the heads of the European Commission, the International Monetary Fund and the European Central Bank.

Nevertheless, German Chancellor Angela Merkel has firmly reiterated her position that any new talks will have to wait until after the Greek referendum on Sunday.

In some positive economic news from the U.S., private sector employment in the country increased more than expected in June, making investors optimistic ahead of Thursday's employment report for June.

Meanwhile, indicating a modest acceleration to the pace of growth in the U.S. manufacturing sector, the Institute for Supply Management's report on Wednesday showed its manufacturing index rose slightly more than expected in June.

Gold for August delivery, the most actively traded contract, dropped $2.50 or 0.2 percent, to settle at $1,169.30 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday. This was the lowest settlement since June 5.

Gold for August delivery scaled an intraday high of $1,174.40 and a low of $1,166.70 an ounce.

On Tuesday, gold prices dropped $7.20 or 0.6 percent, to settle at $1,171.80, as its safe haven appeal waned on speculation that Greece and its creditors could still agree on the modalities of the bailout aid badly needed by Athens.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 711.44 tons on Wednesday, from its previous close of 713.23 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.23 on Wednesday, up from its previous close of 95.52 on Tuesday in late North American trade. The dollar scaled a high of 96.25 intraday and a low of 95.47.

The euro trended lower against the dollar at $1.1058 on Wednesday, as compared to its previous close of $1.1140 in North American trade late Tuesday. The euro scaled a high of $1.1172 intraday and a low of $1.1054.

On the economic front, private sector employment in the U.S. increased more than expected in June, a report from payroll processor ADP said Wednesday. Employment in the private sector jumped by 237,000 jobs in June following an upwardly revised increase of 203,000 jobs in May. Economists expected an increase of about 220,000 jobs compared to the addition of 201,000 jobs originally reported for the previous month.

The ISM said its purchasing managers index rose to 53.5 in June from 52.8 in May, with a reading above 50 indicating an increase in manufacturing activity. Economists expected the index to edge up to 53.2.

Elsewhere, the manufacturing sector in China continued its path of narrow expansion, with a manufacturing PMI score of 50.2 in June, the National Bureau of Statistics said on Wednesday. That was unchanged from the May reading, although shy of estimates for 50.4.

China's manufacturing sector contracted at a slightly slower pace in June, HSBC said in Wednesday's revised manufacturing PMI with a score of 49.4. That was a downward revision from last month's preliminary reading of 49.6 - but up from the 49.2 reading in May.

The euro area manufacturing sector expanded as initially estimated in June, final data from Markit showed Wednesday. The Purchasing Managers' Index rose to 52.5 in June from 52.2 in May. The reading came in line with flash estimate published on June 23. It was the highest reading since April 2014.

Germany's manufacturing sector expanded as estimated on stronger production and new orders in June, final data from Markit showed Wednesday. The Markit/BME manufacturing Purchasing Managers' Index rose to 51.9 in June from a three-month low of 51.1 in May. The reading was in line with expectations.

British manufacturing sector expanded at the slowest pace in more than two years in June as production and new orders logged slower growth, survey results from Markit Economics showed Wednesday. The seasonally adjusted Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index dropped unexpectedly to 51.4 in June from revised 51.9 in May. Economists expected the index to rise to 52.5 from the initially estimated value of 52 in May.