Gold inches up with Greece default fears, Fed meeting in focus

Investing.com - Gold prices edged higher on Monday, as uncertainty over the future of Greece and concerns surrounding the impact of an interest rate hike in the U.S. remained in focus.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery tacked on $4.80, or 0.41%, to trade at $1,184.00 a troy ounce during European morning hours.

On Friday, gold prices dipped $1.20, or 0.1%, to close at $1,179.20. Futures were likely to find support at $1,174.30, the low from June 10, and resistance at $1,187.40, the high from June 11.

Also on the Comex, silver futures for July delivery rose 12.3 cents, or 0.78%, to trade at $15.94 a troy ounce. Silver lost 13.5 cents, or 0.85%, on Friday to end at $15.82.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% to 95.39 early on Monday.

Gold traders are looking ahead to Wednesday’s Fed rate statement for a clear signal on when it could start to raise interest rates.

Recent economic reports have indicated that the U.S. economy was regaining strength after contracting in the first quarter, fuelling speculation that the Federal Reserve could raise rates as soon as September.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Meanwhile, the euro was under pressure as investors continued to monitor developments surrounding talks between Greece and its international creditors, amid growing concerns that the country could default on its debt be forced out of the euro zone.

Elsewhere in metals trading, copper for July delivery slumped 3.3 cents, or 1.22%, to trade at $2.645 a pound as worries over the health of China's economy dampened the appeal of the red metal.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.