A new offer by Greece on a reform package to avoid a default on its debts raised hopes that a tangible deal with international creditors was still possible, lifting global stock indexes and the euro yesterday. Gold prices fell more than one per cent as the US dollar gained.

Eurozone finance ministers left a meeting with Greek officials in Brussels voicing optimism at Greece’s offer, with talk of more work ahead to achieve a potential deal this week.

The ministers agreed to reconvene before the week is over, after Greece thrashed out details with its international creditors the European Commission, the European Central Bank and the International Monetary Fund.

The euro traded at $1.13930, up 0.38 per cent on the EBS trading platform, closing in on the Asian trading session high of $1.14040. MSCI’s all-country stock index climbed 1.2 per cent.

At 11.23am ET (1523 GMT), the Dow Jones industrial average rose 162.32 points, or 0.9 per cent, to 18,178.27, the S&P 500 gained 19.39 points, or 0.92 per cent, to 2,129.38 and the Nasdaq Composite added 43.20 points, or 0.84 per cent, to 5,160.20.

Greek stocks were nine per cent higher, while Greek bank shares surged 20.8 per cent. European shares were up 2.2 per cent. US Treasuries prices tumbled on optimism over a Greek deal and as stronger-than-expected US existing home sales data supported expectations of a September Federal Reserve rate hike. Benchmark 10-year prices were last down 24/32 to yield 2.35 per cent, from a yield of 2.27 per cent late Friday.

The National Association of Realtors said on Monday existing home sales increased 5.1 per cent to an annual rate of 5.35 million units, the highest in five and a half years. The data was the latest indication that housing and overall economic activity were gathering steam in the second quarter.

Athens is running out of cash to repay a €1.6 billion IMF loan due at the end of the month unless it secures new financing from international creditors.

Speculation is rife that, if no deal is reached, Greece would need to impose capital controls today to avert a banking crisis as savers keep withdrawing funds from banks. The ECB yesterday raised the ceiling on emergency liquidity Greek banks can draw from the country’s central bank for a third time in six days.

Gold fell more than one per cent as global equities jumped on the signs of progress in Greek debt talks, which curbed safe-haven demand for the metal.

Spot gold was down as much as 1.4 per cent to a session low of $1,183.75 an ounce.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.