LONDON—The spot price of gold softened as the dollar gained against the euro, providing a headwind that has offset the metal's safe-haven appeal from the Greek crisis.
Gold is often seen as a safe place to park cash in times of economic insecurity. But fears of the wider impact of Greece's financial problems on the euro zone have softened the single currency, pushing the dollar higher. Like other dollar-denominated commodities, gold appears more expensive when the greenback strengthens, often putting off foreign currency buyers.
Ahead of the New York day, spot gold was down $4.90, or 0.3%, at $1,525.70 a troy ounce. Silver fell 34 cents, or 0.9%, at $35.47 an ounce.
A lack of clarity over the U.S. Federal Reserve's next monetary policy step is also making gold investors nervous, as the scheduled end of its gold-supportive $600 billion bond-buying program later this month looms.
"This presents a hurdle for gold in the short term, and is one of the key reasons why we think the yellow metal will be under pressure during the summer," UBS analyst Edel Tully wrote in a note to clients.
The program, known as quantitative easing, has been partially responsible for gold's impressive rise in recent years, as has injected cash into the economy and diluted the U.S. currency.
The Federal Open Market Committee is scheduled to meet on the subject on June 21 and 22, with subsequent comments by Federal Reserve Chairman Ben Bernanke likely to be picked apart by market players for clues as to the relative tightness of U.S. policy going forward.
Among other metals, spot platinum was down $12, or 0.7%, at $1,758 an ounce while spot palladium was down $11, or 1.4%, at $761 an ounce.
Write to Francesca Freeman at francesca.freeman@dowjones.com
