Singapore: Gold rose for a third straight session on Wednesday, helped by a softer dollar and worries over the Greek debt crisis, but a looming U.S. interest rate increase and outflows from bullion-backed funds continued to weigh on the market.
Spot gold climbed 0.5 percent to $1,181.74 an ounce at 0707 GMT after gaining 0.4 percent in the previous two sessions.
The metal fell to $1,162.35 on Friday, its lowest since March 19, after a strong U.S. nonfarm payrolls report.
"Bullion found support from renewed Greek debt concerns," said HSBC analyst James Steel. "That said, Greek exit concerns have clearly had a less robust impact on gold than during the earlier periods of `Grexit` concerns."
A planned meeting between the leaders of Germany, France and Greece on Wednesday was in doubt as Greece`s reform proposals to unlock new funding to ward off a debt default fell well short, European Union officials said.
Gold was also helped by a slide in the dollar in reaction to a comment from the Bank of Japan governor that the yen was "very weak".
Capping gold`s gains were outflows from exchange-traded funds (ETFs).
Holdings in SPDR Gold Trust, the top gold ETF, fell 0.42 percent to 705.72 tonnes on Tuesday, the lowest since January. Holdings of the top eight ETFs were at their lowest in five years.
"We continue to see outflows from ETFs and this may limit price moves to the topside," said MKS Group trader Sam Laughlin.
The $1,170 level continues to provide support, but the price will face resistance at $1,185, Laughlin said.
Physical demand is not providing much support for gold.
Expectations of a further drop in bullion and better returns from surging equities in China have tamed demand for the precious metal in Asia.
Friday`s drop to an 11-week low failed to draw much interest in the world`s top two buyers, equities-obsessed China and India, where worries about a poor monsoon and lack of wedding demand are holding demand down.
Traders were also waiting for U.S. retail sales data due on Thursday for clues about the strength of the economy and how that will affect the Federal Reserve`s monetary policy.
Strong data could prompt the Fed to raise rates as soon as September, which could hit demand for non-interest-paying bullion.
