Gold declined for a second session in New York as a rise in the dollar curbed demand for the precious metal as an alternative investment.
The dollar gained against the euro as Moody's Investors Service said Greek default risk "remains high" after the nation formally asked investors to exchange their holdings of government debt for new securities last week. International Monetary Fund Managing Director Christine Lagarde said the world economy is "not out of the danger zone."
"The dollar is up on the day, and more than anything today is a currency play" for gold, William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. "The market is digesting the news out of Europe from over the weekend."
Gold futures for April delivery fell 0.1 per cent to $US1,774.6 an ounce by 1:35 p.m. on the Comex in New York. Prices gained 2.9 per cent last week. Before today, the metal was up 13 per cent this year after a 10 per cent increase in 2011, an 11th consecutive annual gain.
Holdings in bullion-backed exchange-traded products rose 5 metric tons to 2,396.9 tons on Feb. 24, data compiled by Bloomberg show.
John Paulson told investors on Feb. 24 that his $US1.2 billion Gold Fund, which declined 11 per cent last year, will outperform his other strategies over five years, according to a person with knowledge of the matter. Paulson & Co, which cut its stake in the three months to Dec. 31, is still the biggest investor in the SPDR Gold Trust, the largest bullion-backed ETP.
Silver for May delivery advanced 0.4 per cent to $US35.57 an ounce. It's up 28 per cent this year, making it the best- performing precious metal.
On the New York Mercantile Exchange, palladium for June delivery was down 0.8 per cent at $US707.35 an ounce. Platinum for April delivery declined 0.3 per cent to $US1,709.20 an ounce.