Gold price edged lower on Wednesday as the dollar pared earlier losses versus the euro, while traders took to the sidelines to await news on Greece’s negotiations with its international lenders to avoid default.
The precious metal has declined for the last three days as the dollar strengthened, and as optimism over the prospects for a deal on Greece prompted investors to favour assets seen as higher risk, such as stocks.
Gold edged higher in earlier trade as both stocks and the dollar retreated, but failed to maintain momentum as those assets recovered from lows. Prices fell to their lowest since June 8 at $1,171.21.
Spot gold was at $1,174.09 an ounce at 1400 GMT, down 0.3 percent, while U.S. gold futures for August delivery were down $2.80 an ounce at $1,173.80.
“Gold continues to struggle with multiple headwinds,” Saxo Bank head of commodity research Ole Hansen said. “But we have nevertheless managed to find some support towards $1,170. We can probably expect the range bound nature will continue for now.”
“Industrial metals and platinum seems to be on the mend and that may indirectly provide some support,” he added.
European stocks fell on Wednesday as the anxious wait for fresh talks aimed at averting a Greek default left the markets vulnerable to sudden moves.
Time is running out before the June 30 deadline when Greece has to repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund, or face default.
The euro was up 0.1 percent against the dollar, but remained well off earlier highs and close to the previous session’s two-week low, when the single currency posted its biggest one-day loss since mid-March.
Speculation that the Federal Reserve will raise rates for the first time in nearly a decade has weighed on gold prices this year. Higher rates lift the opportunity cost of holding non-yielding bullion, and benefit the dollar.
Physical demand in top consuming region Asia has been sluggish as monsoon concerns weighed on demand in India and a better-yielding stock market kept buyers away in China.
In the official sector, the latest data from the International Monetary Fund showed on Wednesday that Russia and Kazakhstan raised their gold holdings again in May.
Silver was up 0.7 percent at $15.90 an ounce. Spot platinum was up 0.1 percent at $1,066.25 an ounce, while spot palladium was up 0.2 percent at $695.75 an ounce.