Gold was hovering near the key $1,200-an-ounce level on Monday, its lowest in seven weeks, as support for the safe-haven metal eased after a deal was struck over Greece’s debt, while the absence of major consumer China also took a toll.
Eurozone finance ministers reached an agreement on Friday to extend heavily indebted Greece’s financial rescue by four months, officials on both sides said.
Public holidays in No. 2 gold consumer China due to the Lunar New Year also put some pressure on prices. Chinese buying typically provides a floor for falling prices.
The greenback has been robust in recent months on expectations the Federal Reserve would soon raise rates on the back of a strong economic recovery in the United States.
Investors remain cautious about gold’s price outlook. Hedge funds and money managers cut their bullish stance in gold futures and options for the third straight week, taking it to a six-week low in the week to Feb. 17, U.S. Commodity Futures Trading Commission data showed on Friday.