Metals Stocks: Gold futures suffer a loss for the year’s first half

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Markets/commodities reporter

Deputy markets editor

Gold futures on Tuesday marked a loss for the first half of the year as speculation that Greece and its creditors could strike a last-minute deal and strength in the U.S. dollar helped send the metal’s prices lower for the session.

Gold for August delivery on Comex GCQ5, -0.65%  fell $7.20, or 0.6%, to settle at $1,171.80 an ounce. On Tuesday, prices tapped a low of $1,165.40 — a level prices haven’t settled at since mid-March.

Year to date, prices based on the most-active contracts were down by roughly 1%. For the month, they lost about 1.5%. Read: These are 2015’s best commodity gainers so far

September silver SIU5, -0.32%  fell 11.4 cents, or 0.7%, to $15.581 an ounce — for a year-to-date loss of 0.1%.

It would appear that investors just don’t believe that Prime Minister Alexis Tsipras will let this go down to the wire, said Richard Gotterer, managing director and senior financial adviser at Wescott Financial Advisory Group. “I guess there’s hope and belief that a deal will emerge” before the July 5th bailout referendum, he said.

See: Athens considers last-minute bid to secure a deal.

Greece on Tuesday asked for a new bailout amid a last-minute diplomatic push to seal some kind of agreement before the country’s current rescue deal expires and it defaults on a payment to the International Monetary Fund.

See: Greek debt crisis: Latest news

Against that news backdrop, the euro EURUSD, -0.7921%  traded lower versus the U.S. dollar and the U.S. ICE dollar index DXY, +0.51%  strengthened, putting pressure on dollar-denominated gold prices.

The only option under which we can see investors buying more gold is if the European Central Bank cuts off the emergency liquidity assistance, said Naeem Aslam, chief market analyst at AvaTrade. This increases the chances of a Grexit to 50% as the banks will be under tremendous pressure to issue some sort of currency IOU, he said.

Under these circumstances, volatility can explode to the upside, pushing gold demand higher as the major risk will be the contagion issue, which “could very well take place in the absence of liquidity in the market or investors losing their faith in the euro,” said Aslam.

Gold prices Tuesday likely saw additional pressure from a lack of gold buying, particularly in India, said Chintan Karnani, chief market analyst at Insignia Consultants. “Indian rural buyers are waiting to get a clear picture of monsoon rains before they commit to buy gold,” he said.

In other metals trade, October platinum PLV5, -0.24%  fell $2.80, or 0.3%, to $1,079.50 an ounce, around 10.8% lower year to date, while September palladium PAU5, +0.98%  rose $6.20, or 0.9%, to $672.65 an ounce, with prices down 15.8% year to date.

September copper HGU5, -0.63%  fell 1.85 cents, or 0.7%, to $2.615 a pound. Prices were down about 7.5% year to date.

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