Gold fell to a 15-week low and silver slumped to the cheapest in seven months after Greece’s economic crisis boosted haven demand for the dollar, eroding the allure of precious metals as stores of value.
On the Comex in New York, gold futures for August delivery declined 1.8 percent to $1,151.70 an ounce at 10:18 a.m. after touching $1,151.10, the lowest for a most-active contract since March 18. Silver for September tumbled 5.7 percent to $14.85 an ounce. Earlier, the metal reached $14.825, the cheapest since Dec. 1.
The dollar rose to a five-week high against a basket of 10 currencies. Greek Prime Minister Alexis Tsipras is in Brussels for what could be a last chance to secure a rescue from European leaders and keep his country in the euro. In the week ended June 30, the net-long position in gold futures and options plunged 55 percent, the most since U.S. government data began in June 2006.
“The economic crisis in Greece has not been able to help gold since most investors are rushing to buy more dollars,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The anticipation of tightening by the Fed is keeping gold under pressure.”
Through Monday, gold dropped 11 percent in the past 12 months as the greenback jumped 18 percent.