Gold futures nurse losses after U.S. durable goods data

Investing.com - Gold prices held on to losses on Tuesday, after data showed that U.S. durable goods orders fell more than expected in May, while core orders also missed forecasts, dampening optimism over the strength of the economy.

The U.S. Commerce Department said that total durable goods orders, which include transportation items, declined by 1.8% last month, worse than expectations for a drop of 0.6%. Orders for durable goods in April were revised to a drop of 1.5% from a previously reported decline of 1.0%.

Core durable goods orders, excluding volatile transportation items, inched up by 0.5% in May, missing forecasts for an increase of 0.6%. Core durable goods orders dipped 0.3% in April.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange dipped $3.90, or 0.33%, to trade at $1,180.20 a troy ounce during U.S. morning hours.

A day earlier, gold tumbled $17.80, or 1.48%, to close at $1,184.10. Futures were likely to find support at $1,173.90, the low from June 17, and resistance at $1,205.70, the high from June 18.

Meanwhile, investors continued to monitor developments surrounding talks between Greece and its international creditors, amid hopes that a deal was within sight.

Euro zone finance ministers failed to reach agreement over Greece’s bailout at an emergency meeting on Monday, but indicated that a final deal could be made later this week.

Eurogroup head Jeroen Dijsselbloem said new reform proposals from the Greek government were “broad and comprehensive,” and a good basis to restart stalled negotiations.

But German Chancellor Angela Merkel and International Monetary Fund head Christine Lagarde both warned that there was still a lot of work to be done.

Greece’s existing bailout is set to expire at the end of this month, when it must also repay €1.6 billion to the IMF. A default by Greece could trigger the country’s exit from the euro zone.

Also on the Comex, silver futures for July delivery slumped 17.9 cents, or 1.11%, to trade at $15.96 a troy ounce, while copper for July delivery rose 3.4 cents, or 1.31%, to trade at $2.601 a pound.

Copper prices rose sharply on Tuesday, after stronger-than-expected data on euro zone manufacturing activity boosted hopes for an increase in demand for the industrial metal.

The preliminary euro zone manufacturing purchasing managers’ index rose to a 14-month high of 52.5 this month from a final reading of 52.2 in May.

German and French manufacturing activity also improved more than expected in June, fueling optimism over the region’s growth outlook and adding to evidence that the European Central Bank's massive stimulus program was taking effect.

Europe as a region is third in global demand for the industrial metal. Copper traders often use manufacturing numbers as indicators for future demand growth.