London: Gold eased on Tuesday, extending the previous day`s losses as the euro slid against the dollar and European stocks rallied on hopes that Greece would reach a deal with its creditors to stave off default.
Spot gold was down 0.1 percent at $1,183.70 an ounce by 0931 GMT, while U.S. gold futures for August delivery fell 40 cents to $1,183.70.
The metal posted its biggest one-day loss in nearly a month on Monday as a rally in stocks markets on the back of optimism over a Greek deal sent last week`s rise into reverse.
"It`s always hard to know exactly how much gold prices are being supported by events in Greece, but we definitely saw yesterday that when you take away some of that immediate risk, the risk premium comes out of the market pretty quickly," Natixis analyst Nic Brown said.
That leaves gold vulnerable to pressure from other elements, he said, such as the prospect of the first U.S. interest rate rise in nearly a decade. That would boost the opportunity cost of holding non-yielding bullion.
"Our bigger-picture view, Greece aside, is that we`re still moving towards a first rate hike from the Fed sometime later this year," Brown said. "There is scope for further strength in the dollar, and consequently we think there are clear downside risks to gold prices in the near term."
Signs that an agreement between Greece and its creditors could be close lifted global shares on Tuesday, though the euro fell against the dollar as some euro zone leaders warned that much work remains to be done.
The dollar is benefiting from upbeat U.S. data. Its strength pressured gold, which is priced in the dollars and tends to rise when the currency is weak.
Some support came from a 3.5 tonne inflow for the world`s largest gold-backed exchange-traded fund, the New York-listed SPDR Gold Shares.
"(This) doubtless prevented an even more pronounced price slide -- this was the highest daily inflow since the beginning of April," Commerzbank said in a note.
Physical gold demand in Asia has been sluggish as monsoon concerns weighed on demand in India and a better-yielding stock market kept buyers away in China.
Among other precious metals, silver was up 0.8 percent at $15.97 an ounce, while platinum gained 1.4 percent to $1,070.99 and palladium rose 1 percent to $700.30.
Platinum had dropped to its lowest in more than six years on Monday, at $1,053.75 an ounce.
