Gold price dented by firm dollar ahead of Fed, Greece in focus
London (Jun 16) Gold slipped on Tuesday, as the dollar firmed ahead of the U.S. Federal Reserve's two-day policy meeting, while a looming Greek crisis failed to trigger sustained flight to safety demand.
Spot gold was down 0.3 percent at $1,182.53 an ounce by 1004 GMT, while U.S. gold futures for August delivery were down $3.40 an ounce at $1,182.40.
"Gold is lower due to a strengthening dollar and uncertainty around Greece," Saxo Bank senior manager Ole Hansen said.
"The Fed meeting is still the theme ... there won't be a rate decision but the question is obviously how they will communicate their current sense of the economy," he said, adding that any comment on the interest rate timing could have some impact on the gold price direction.
A two-day Federal Open Market Committee (FOMC) meeting begins later on Tuesday.
Investors will be closely monitoring comments from Fed chair Janet Yellen for clues on when the U.S. central bank could raise record low interest rates.
Bullion has not made much leeway in the past few months on uncertainty over the timing of a rate rise which would diminish demand for the non-interest-paying asset.
U.S. economic data on Monday showed softness in industrial production, contrasting with recent upbeat data.
"The yellow metal may be subject to risk on/off plays should anything concrete come out of the ongoing (Greek) debt negotiations, however the price action will most likely be dollar driven," MKS Group in a note.
European equities fell on concerns about Greece's fate in the euro zone. Athens and its creditors hardened their stances on Monday following the latest breakdown in talks.
Greece now has just two weeks to find a way out of the impasse before it faces a 1.6 billion euro repayment due to the International Monetary Fund.
Although gold is traditionally seen as an alternative investment during times of financial and economic uncertainty, investors were not too concerned on the impact of the Greek crisis on wider financial markets, traders said.
Bullion exchange-traded funds continued to see outflows, with top fund SPDR Gold Trust seeing assets down 0.3 percent to 701.9 tonnes on Monday, the lowest since 2008.
Silver was down 0.5 percent at $16.03 an ounce, while palladium gained 0.2 percent to $736.45 an ounce.
Platinum fell 0.2 percent to $1,084.50 an ounce, within sight of a six-year low of $1,072.50 hit on Monday on a combination of weaker equities and lower gold prices, analysts said.
Source: Reuters
