Gold settles lower as Greek crisis knocks euro

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Gold prices fell on Tuesday as the prospect that Greece would default on a repayment to the International Monetary Fund knocked the euro against the dollar, and as investors remained wary over the metal's longer-term prospects.

The chairman of the Eurogroup said it was too late to extend Greece's existing bailout and that the country's stance toward its creditors and euro zone partners would have to change before a new program could be agreed.

Read MoreGreek government proposes new two-year deal, debt restructuring

fell 1.2 percent to the lowest since June 5 at $1,166.35 an ounce, but was down 0.7 percent at $1,171.05. It was on track to close the second quarter down 1 percent, its fourth straight quarterly fall.

U.S. gold futures for August delivery settled down $7.20 an ounce at $1,171.80.

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"Precious is just not appealing. At a time where it should arguably be performing decently it can't find a bid to save itself," said Amaryllis Gryllaki, sales associate for TD Securities' Global Metals in New York said in a note.

Gold, which often benefits in times of financial market turmoil, has found little support from safe-haven bids. Meanwhile, the U.S. dollar rose 0.7 percent against a basket of major currencies, pressuring gold prices.

"The gold price is telling you the market is not concerned about Greece. It isn't as systemically important as it used to be," said Michael Widmer, metals strategist at Bank of America Merrill Lynch. "The dollar is the bigger force at the moment."

Stocks on Wall Street rose in choppy trade and a global equities gauge ticked up, while the euro remained under pressure.

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Gold's underperformance in the face of what should be bullish pressure from the Greek crisis points to much broader weakness as investors gear up for rising interest rates in the United States this year.

The fallout from Greece in the United States is expected to be modest and not enough to throw the Fed's likely September rate increase off course.

Later on Tuesday, Federal Reserve vice chairman Stanley Fischer said "tentative" signs of wage growth and continued job creation gave him confidence that U.S. labor markets would continue to improve, and gradually help push inflation towards the Fed's 2 percent target.

Silver pared losses after falling 2.2 percent to the lowest since mid-March at $15.40 an ounce. Platinum was down 0.3 percent at $1,074.24 an ounce, and palladium was up 0.9 percent after falling to a two-year low at $661.34 an ounce.