Investing.com - Gold prices declined on Monday, as the U.S. dollar rallied after Greek voters overwhelmingly rejected conditions of a rescue package from creditors on Sunday.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange shed $3.10, or 0.27%, to trade at $1,164.70 a troy ounce during U.S. morning hours. Futures were likely to find support at $1,155.80, the low from July 2, and resistance at $1,180.00, the high from June 30.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to hit a one-month high of 96.71, boosted by a weaker euro.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
The euro was down 0.75% to 1.1031 on Monday while European stock markets sank and the yields on Italian, Spanish and Portuguese bonds spiked amid heightened fears of a messy Greek exit from the euro zone.
The latest reports from Greece said around 62% of those voting in the referendum had backed the government and rejected the bailout conditions. The result of the referendum has added to doubts over Greece’s future in the euro zone and deepened a standoff with its lenders.
Greek Prime Minister Alexis Tsipras welcomed the outcome of the vote and said Athens was returning to bailout negotiations with the express goal of reopening banks, which have been shut for over a week after capital controls were imposed.
Without more emergency funding from the European Central Bank, Greece's banks are facing a cash crunch within days. The ECB was to discuss whether to maintain emergency funding for Greek banks at their current restricted level later Monday.
In a surprise move, Greek Finance Minister Yanis Varoufakis resigned on Monday, despite the referendum results. In a statement, Varoufakis said his decision was prompted in part by “some European participants” expressing a desire for his part in any further negotiations to end.
His replacement was expected to be named after a meeting of Greek political leaders later Monday.
German Chancellor Angela Merkel and French President Francois Hollande were set to meet in Paris on Monday afternoon, while euro zone leaders were expected to hold a conference on Tuesday night to discuss the aftermath of the Greek referendum.
European officials have indicated that they will only continue to finance Greece in return for far-reaching economic reforms.
Uncertainty over Greece has so far failed to spur increased investor demand for gold, often perceived as a safe-haven asset.
Also on the Comex, silver futures for September delivery declined 9.2 cents, or 0.59%, to trade at $15.56 a troy ounce, while copper for September delivery tumbled 7.2 cents, or 2.76%, to trade at $2.545 a pound.