Gold Holds Near Two-Week Low as Market Eyes Greece

 Singapore(Sharemasterindia.com): Gold was little changed on Thursday, hovering close to the prior session's two-week low as investors awaited news on Greece's talks with its international lenders to avert a default, while prospects of a U.S. interest rate hike also reined in prices.

Fundamentals

* Spot gold was steady at $1,174.90 an ounce by 0108 GMT, after losing 2.2 percent in the past four sessions. Prices fell to their lowest since June 8 at $1,171.03 on Wednesday.

* Athens's talks with creditors bogged down on details, with next week's deadline to repay 1.6 billion euros to the International Monetary Fund looming and threatening to trigger the country's removal from the euro zone.

* Gold, which is seen as a safe haven during times of financial and economic uncertainties, is facing additional pressure from a stronger dollar and expectations of an U.S. interest rate increase.

* The dollar steadied after giving back gains against the yen early as debt negotiations to avert a Greek debt default hit a bump, while the euro treaded water after showing a more limited response.

* The outlook for the dollar, however, remained upbeat amid expectations U.S. interest rates in the world's largest economy would rise sooner than later.

* Speculation that the U.S. Federal Reserve will raise rates for the first time in nearly a decade has weighed on gold prices this year. Higher rates lift the opportunity cost of holding non-yielding bullion.

* Wednesday's data on U.S. gross domestic product confirmed the improving outlook. The final figure for the first quarter showed contraction in the economy was less than previously estimated.