By Amanda Cooper LONDON (Reuters) - Gold fell on Thursday after the U.S. dollar hit a three week-high against the euro as concern escalated over the impact of the Greek debt crisis on the euro zone, knocking commodities. The Greek prime minister said he would form a new government, while euro zone finance ministers conceded that an agreement over a second international bailout for Athens would take longer than expected. That pummelled the euro and pushed the cost of insuring Greek and several other peripheral euro zone nations' debt against default to record highs. It also dented palladium, copper and gold, which normally profits from such environments. On Wednesday the VIX options volatility index, the so-called "fear gauge" of Wall Street, hit three-month highs. Spot gold fell $4.99 an ounce to $1,524.86 an ounce by 0557 GMT after rising for a second straight session to around $1,533 on Wednesday on declines in equities. Gold is well below a lifetime high around $1,575 touched in early May. The 1.6 percent rise in the dollar against a basket of currencies this month has contributed to gold's 0.6 percent fall in June, as a stronger dollar makes gold less attractive to non-U.S. buyers.

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