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Forex Pros – pros – Last week saw gold prices slump to a six-week low on Friday, as Greece's approval of a key austerity package needed to avoid a sovereign debt default diminished the safe haven appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery settled at USD1,487.95 a troy ounce by close of trade on Friday, falling 1% over the week.

Prices fell below the psychologically important level of USD1,500 an ounce on Friday, hitting USD1,478.55 a troy ounce, the lowest price since May 17.

The Greek parliament passed two critical austerity bills earlier in the week, paving the way for the release a EUR12 billion tranche of bailout funds from the European Union and International Monetary Fund.

Had the austerity package been rejected, it could have resulted in the euro zone’s first sovereign debt default, as Greece needs to cover EUR6.6 billion of bonds maturing in August.

Concerns that Greece’s debt woes would spill over to the region’s banking sector eased after German Finance Minister Wolfgang Schaeuble said on Friday that German banks agreed to roll over nearly EUR2 billion in Greek bonds maturing through 2014.

Meanwhile, receding concerns over the U.S. economic outlook also weighed on the precious metal.

The U.S. Institute for Supply Management said Friday that its June manufacturing index came in at 55.3, above expectations for 51.5, marking the 23rd consecutive month of growth.

Despite the recent pullback in gold prices, global financial service provider BNP Paribas forecast prices to average USD1,510 an ounce in 2011 and USD1,600 an ounce in 2012, as rising inflationary pressures were expected to support prices.

“The surge in inflationary pressures goes a long way towards explaining the strong demand growth for gold, notably in India and China, as consumers seek to hedge themselves against rising prices,” the lender said in a report Friday.

Elsewhere, silver for September delivery traded at USD33.89 a troy ounce by close of trade on Friday, dropping 1.2% over the week, while copper for September delivery traded at USD4.314 a pound, surging 4.75% on the week.

Nymex floor trading is closed Monday for the U.S. Independence Day holiday.

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