Gold prices slipped in Europe yesterday, extending the previous session's 2 per cent price drop, as concerns over the progress of talks on a Greek bailout weighed on the euro and on assets seen as higher risk such as stocks and commodities.
Spot gold was down 0.5 per cent at $1,717.90 an ounce at 1019 GMT, while US gold futures for February delivery were down $19.20 an ounce at $1,721.20.
The euro fell as Greek politicians struggled to agree on austerity measures needed to secure a new bailout for the debt-laden nation, keeping alive the risk of a messy default that could hurt the Eurozone.
"It's been a bit of a rollercoaster, the relationship between gold and the euro. One day it's positive, one day it's negative. But this morning, dollar strength, or euro weakness, is clearly affecting gold," said RBS analyst Nikos Kavalis.
The Greek government and party leaders must agree on the terms of a second bailout with IMF and EU inspectors before Eurozone finance ministers next meet, a government official said yesterday.