Gold slipped early on Tuesday as the dollar firmed as the US Federal Reserve policy meeting got underway, while a looming Greek crisis failed to trigger sustained demand for safe-haven assets. Spot gold fell 0.4 percent to $1,181.45 an ounce by 2:59 pm EDT (1959 GMT), while US gold futures for August delivery settled down $4.90 an ounce at $1,180.90.
"Gold is weaker because people are still thinking that the US economy is recovering," Citi strategist David Wilson said. "So people are focusing on those positives of the US economy rather than the macro negatives of a Greek exit (from the European Union), given that the Athens crisis has been dragging on for a very long time."
US permits for future home construction surged to a near eight-year high in May, suggesting a building up of momentum in housing and the broader economy after a dismal performance at the start of the year. "You've got some decent data today, which also means the Fed becomes more likely to move, particularly by September and so I think the market's trying to price that," said Rob Haworth, senior investment strategist for US Bank Wealth management, referring to the Fed's likelihood to raise interest rates.
Investors are waiting for a statement on Wednesday from the two-day Federal Open Market Committee (FOMC) meeting, looking for clues from Fed Chair Janet Yellen on when the US central bank could raise interest rates from record lows. Bullion has not made much headway in recent months because of uncertainty over the timing of a rate rise, which would reduce demand for the non-interest-paying asset. There were continued outflows for exchange-traded bullion funds, with assets at top fund SPDR Gold Trust falling 0.3 percent to 701.9 tonnes on Monday, the lowest since 2008. In other metals, silver was down 0.5 percent at $16.01 an ounce, while palladium lost 0.7 percent to $732.35. Platinum fell 1.1 percent to $1,074.50, within sight of a six-year low of $1,072.50 hit on Monday.
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