Gold slips in Europe

Gold slipped on Tuesday as the dollar firmed ahead of the US Federal Reserve policy meeting, while a looming Greek crisis failed to trigger sustained demand for safe-haven assets. Spot gold fell 0.7 percent to $1,178.06 an ounce by 1419 GMT, while US gold futures for August delivery were down $8.20 an ounce at $1,177.60.
"Gold is weaker because people are still thinking that the US economy is recovering," Citi strategist David Wilson said. "So people are focusing on those positives of the US economy rather than the macro negatives of a Greek exit (from the European Union), given that the Athens crisis has been dragging on for a very long time." Investors will be closely monitoring the two-day Federal Open Market Committee (FOMC) meeting starting on Tuesday, looking for clues from Fed chair Janet Yellen on when the US central bank could raise interest rates from record lows.
"The Fed meeting is still the main theme ... there won't be a rate decision, but the question is obviously how they will communicate their current sense of the economy," Saxo Bank's Ole Hansen said, adding that any comment on interest rate timing could have some impact on the direction of gold prices.
Bullion has not made much headway in recent months because of uncertainty over the timing of a rate rise, which would reduce demand for the non-interest-paying asset. US data on Tuesday showed a fall in housing starts in May, but a surge in permits for future construction to the highest level in nearly eight years suggests the pullback will be temporary. European equities fell on the concerns about Greece, with Athens and its creditors hardening their stances after the latest breakdown in talks.
Greece now has only two weeks to resolve the impasse before a 1.6 billion euro ($1.8 billion) repayment to the International Monetary Fund falls due, though traders, but traders said gold investors were not too concerned about the impact of the Greek crisis on wider financial markets. There were continued outflows for exchange-traded bullion funds, with assets at top fund SPDR Gold Trust falling 0.3 percent to 701.9 tonnes on Monday, the lowest since 2008. In other metals, silver was down 1.1 percent at $15.90 an ounce, while palladium lost 0.1 percent to $734.25. Platinum fell 0.9 percent to $1,076.75, 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.