LONDON—Spot gold was lower in Europe Friday as a stronger dollar put a crimp on demand for the yellow metal as an alternative asset.
The spot price for the metal was down 0.3% on the day at $1,525.10 a troy ounce. In Asian trading, it fetched as much as $1,530.49.
"A reversal of early U.S. dollar weakness weighs on gold demand," Citi Global Commodities said in a recent report to clients. The greenback, in which gold is priced, is strong after hitting a three-week high against the euro Thursday on persistent worries about Greece's debt crisis and a potential global slowdown.
Market players have predicted a choppy day of trade for the commodities as German Chancellor Angela Merkel and French President Nicolas Sarkozy meet to try to work out a compromise on a possible aid package for Greece before an EU summit next week.
"The complex looks set to remain volatile in the coming sessions as Greek default fears intensify," said FastMarkets.com analyst James Moore.
"Short term it remains vulnerable to a broader rout of risk appetite, but, as we have seen previously, gold is quick to recover once the initial selling is satisfied as investors flock towards the safe-haven assets."
Spot silver was also lower, falling 1.1% to $35.088 an ounce. However, Barclays Capital technical analysts suggested dip-buying may help to create a floor under the often-volatile metal's price.
In other metals, spot platinum was down 0.4% at $1,744.50 an ounce, and spot palladium had fallen 0.8% to $746.75 an ounce.
