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By Bloomberg

Gold retreated after Greece secured a deal paving the way to a new bailout and as investors weighed the timing of a U.S. interest-rate increase.

Greece agreed with creditors on the reforms needed to start formal negotiations over a third bailout program in five years and remain in the euro. Concerns about a possible fracturing of the common currency buttressed gold’s safe-haven appeal this year even as the dollar strengthened amid speculation that the Federal Reserve will raise borrowing costs. Fed Chair Janet Yellen maintained her call for a rate increase this year.

“The market is relieved that Greece and its creditors finally managed a deal, which removes an important risk factor from financial markets,” Jens Naervig Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by e-mail. “With firm progress in the matter of solving Greece’s public-debt issues, investors are reducing demand for safe-haven assets such as gold.”

Bullion for immediate delivery fell for the first time in four sessions, declining 0.5 percent to $1,157.65 an ounce at 12:11 p.m. in London, according to Bloomberg generic pricing. Prices capped a third weekly drop last week, after falling to $1,147.36 on Wednesday, the lowest level since March 18. Gold futures for delivery in August slipped 0.1 percent to $1,156.20 on the Comex in New York.

Greek Prime Minister Alexis Tsipras reached a settlement with his country’s creditors after more than 17 hours of talks in Brussels that ended Monday morning, agreeing to European demands for immediate action to qualify for as much as 86 billion euros ($95 billion) of aid he needs to keep his country in the euro.

Euro Risks

“It’s understandable for gold prices to come off following the removal of key euro zone risks,” UBS AG analysts including Joni Teves in London said in an e-mailed note. “Yet given the relative lack of significant safe-haven flows to begin with, the downside should be contained.”

Gold also dropped as the dollar gained. The Bloomberg Dollar Spot Index, a gauge of the greenback’s strength against 10 major currencies, climbed as much as 0.5 percent. It’s 5.4 percent higher this year. Bullion and the dollar tend to move inversely.

Holdings in bullion-backed exchange-traded products slipped for a third session as of Friday, declining 1.3 metric tons to 1,585.3 tons, near the lowest since 2009.

Silver for immediate delivery fell 0.2 percent to $15.5434 an ounce, breaking three sessions of advances. Platinum added 0.2 percent to $1,034.40 an ounce. Palladium was 1.3 percent higher at $660.90 an ounce, erasing a drop of as much as 1.5 percent.