Gold prices retreat on hopes Greece will be bailed out

Gold inched down on Wednesday trading as expectations that Greece will receive a second bailout emboldened investors to buy risky assets at the expense of safe havens.

Yesterday, Jean-Claude Junker, who heads the euro-area Finance Ministers, ruled out the possibility of total restructuring for Greek debt, increasing speculations are increasing that European officials may approve new bailout for Greece to prevent a possible default and calm markets down, where Junker said that a decision will be made regarding the Greek debt issue by the end of June.

Fitch mentioned that Greece will probably get another aid from the EU and IMF, expectations refer to 30 billion euros, to avert the default scenario.

The previous session, gold shed $6.40 or 0.42% after closing at $1519.80 an ounce, while gold price was setin London at $1518.50 per ounce declining from $1521.50 during the AM fixing.

Gold prices were not affected by the grim news during the Asian session as the Australian economy contracted the most in two decades by 1.2%, while Chinese manufacturing expansion eased in May to the slowest pace in nine months.

Later in the day, euro zone, UK and US will release manufacturing data for the month of May which will provide evidence about the strength of global recovery in the second quarter.

By extension, the precious metal was not affected by the dollar's drop seen over the previous weeks.

The dollar dropped today against a basket of major currencies as the dollar index fell to 74.45 compared with the day's opening level of 74.60.

Spot gold is traded at $1531.87 an ounce after reaching a high of $1535.87 and a low of $1529.45., while oil ticked up to $102.75 a barrel from the day's starting level of $102.60.

The shiny metal may sell some sell off by investors as momentum indicators show that it is traded in overbought areas, where $1500 remains a solid support level.

Among other precious metals, sliver steadied at $38.15 near the day's opening, platinum rose to $1822.50 from $1820.00 and palladium inched up to $774.70 from $774.20, as of 07:00 GMT.