Gold dips in Europe

Gold dipped on Tuesday as an uptick in the dollar offset the supportive impact of concerns over Greece's future in the euro zone and fears over escalating violence in Ukraine, which hurt risk appetite. A 0.2 percent rise in the dollar against its currency basket led gold to stall after the previous day's rise, preventing a steeper recovery from Friday's three-week low.
Spot gold was down 0.2 percent at $1,236.30 an ounce at 1405 GMT, while US gold futures for April delivery were down $4.90 an ounce also at $1,236.60. Prices slid to $1,228.25 on Friday after upbeat US jobs data fuelled expectations that the Federal Reserve will raise interest rates this year, overriding concerns about the economic health of the euro zone, which lifted prices 8 percent last month.
Those concerns are now reasserting themselves, with nervousness over Greece potentially withdrawing from the euro and the conflict in Ukraine weighing on global markets on Tuesday. Investors will now monitor a Greece-dominated meeting of euro zone finance ministers on Wednesday. "With a stronger US currency it will be difficult for gold in dollar terms to significantly rise, but in euro terms it is likely that we see prices up in coming weeks thanks to increased buying for coins and bars," Commerzbank analyst Carsten Fritsch said.
"Any outcome from the finmins meeting tomorrow will likely set the direction for gold in the upcoming days or weeks." Euro-priced gold stood just below 1,100 an ounce on Tuesday. They hit their highest since April 2013 at 1,156.14 euros on January 26. The probability of Greece leaving the euro zone has risen several notches as Prime Minister Alexis Tsipras has taken an increasingly hard line over government debt.
European Commission President Jean-Claude Juncker told Greece not to expect the euro zone to bow to Tsipras' demands in a growing confrontation that has rattled financial markets and prompted US and Canadian pleas for calm and compromise. On the main physical markets for gold, premiums over spot prices on the Shanghai Gold Exchange contracted slightly ahead of next week's Lunar New Year holiday, MKS said in a note on Tuesday, but remained between $2.50-3.50, showing demand has emerged at lower levels. Among other precious metals, silver was down 0.5 percent at $16.92 an ounce. Platinum was up 0.1 percent at $1,215.80 an ounce, while palladium was down 0.1 percent at $776.35 an ounce.