Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dropped 0.6% to close at a two-week low under $1,177 as generally upbeat U.S. economic data and hopes for a deal between Greece and its creditors reduced demand for alternative assets.

New home sales rose last month to the highest level in seven years, boosting expectations that the important housing market will gather momentum in the second half of the year. The strong data comes one day after reports that existing home sales rose by the most since 2009 in May.

Orders for durable goods fell last 1.8% last month, slightly more than forecast, dragged down by slower demand for commercial aircraft. However, shipments of core capital goods, considered a proxy for business investment, rose by 0.3%.

The dollar rallied on the generally upbeat data as traders weighed the possibility that U.S. monetary policy will tighten this year as much of the rest of the world continues to ease. Fed Governor Jerome Powell added fuel to the speculation by putting the odds of September rate hike at 50-50. Higher interest rates strengthen the dollar, weighing on gold and other commodities denominated in the currency for international trade

European stocks rallied as Greece inches closer to an updated bailout deal. Eurozone finance ministers will meet for the third time this week to consider a new proposal from Greek PM Alexis Tsipras offering to raise taxes and cut pensions in exchange for the funds needed to prevent default.

The other precious metals were mixed, with silver falling 2.5% to a two-month low. Platinum picked up 0.7. Palladium finished nearly flat.

At the Comex close: August gold dropped $7.50 to $1,176.60; July silver fell 40 cents to $15.74; July platinum picked up $6.90 to $1,067.50; September palladium inched up 30 cents to $695.75 an ounce.