NEW YORK (
Monday were trying to retake $1,160 an ounce despite a stronger U.S. dollar and weaker euro.
Gold for June delivery was adding 60 cents to $1,154.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,160.70 and as low as $1,151.11. The
was adding 0.16% to $81.48 while the euro was sinking 0.33% against the dollar. The spot gold price Monday was diverging with the futures market and slipping over $3, according to Kitco's gold index.
Greece debt worries were undermining the euro as talks between the country, the International Monetary Fund and European Union continue. Greek 10-year and two-year bonds are yielding 9.38% and 12.71%, respectively, which indicates weak investor confidence in the country's ability to repay its debts.
Greece has asked for a bailout package
and now the IMF and EU must decide on how much money to immediately lend the government and at what interest rate. The EU is pressuring Greece to slash its budget deficit even further for 2011 and 2012 and German Chancellor Angela Merkel said Greece will get its money when it meets certain requirements.
weaker euro was pushing the dollar higher
and was weighing on gold's spot price as the metal becomes more expensive to buy in non-U.S. currency. However, gold prices in New York on the futures market were drifting towards the $1,160 an ounce area. Traders are headed into options expiration on Tuesday so the paper market will experience minor volatility.
"Options expirations is almost a guarantee that markets will sell off somewhat," says David Morgan, founder of
. "My guess is that we close under $1,155 in the gold market or lower under $1,150 which is the next strike price we're looking for ... as we get closer we'll see more and more selling pressure."
The big event this week is the
, which begins on Tuesday. Analysts expect traders to remain cautiously bullish ahead of the key interest rate announcement on Wednesday. In the
Fed's last beige book
, which is a report preparing the Fed for its next FOMC meeting, Chairman Ben Bernanke said that economic conditions were improving across the country but that the jobs market was still weak. As long as unemployment worries surpass inflation fears, the Fed is expected to keep rates at zero or 0.25%.
More on Gold
Options Hurt Gold Prices
was up 12 cents to $18.31 while copper prices were rising 1 cent to $3.52.
Mining stocks, a more leveraged way to
, were mixed.
was trading at $40.52 while
was up 0.53% to $53.35. Other large-cap miners
were rising slightly at $18.20 and $40.84, respectively.
Freeport McMoRan Copper & Gold
were rising 2.02% to $81.14 and
was trading up 0.95% to $40.32.
Shares of the gold ETF,
SPDR Gold Shares
, were slipping 0.21% to $112.95.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.