Gold struggled below $1,200 an ounce on Tuesday, following small overnight losses, hurt by a firmer dollar and the absence of any robust safe-haven bids stemming from the Greek debt crisis.

Spot gold was little changed at $1,183.93 an ounce by 0320 GMT, after losing 0.3 per cent on Monday.

Greece had calmed immediate fears of a default on Monday by making a crucial €750 million ($837 million) payment to the International Monetary Fund a day early. But its finance minister said the liquidity situation was “terribly urgent’’ and a deal to release further funds was needed in the next couple of weeks.

Cash-for-reform deal

Euro zone finance ministers welcomed some progress in slow-moving talks on a cash-for-reform deal between Athens and the IMF, the European Commission and the European Central Bank, but said more work was needed to reach a deal. Failure to do so could see Greece leave the euro zone.

“The Greek issue has not prompted any safe-haven bids. Even disappointing data last week from the United States failed to push gold higher, showing lots of caution among bullion investors,’’ said a trader in Hong Kong.

Gold will probably extend its losses under $1,200, the trader said.

Strong dollar

Strength in the dollar underpinned the bearish sentiment in gold. A strong dollar makes gold more expensive for holders of other currencies, while also diminishing its appeal as a hedge. The dollar was trading near a one-week high against the euro on Monday due to worries over Greece.

Bullion also failed to get a big lift from last week’s U.S. jobs data, which tempered views that a US rate rise could come at the Federal Reserve’s next policy meeting in June. Higher rates could dent the demand for non-interest-paying bullion.

SPDR Gold Trust

Holdings in SPDR Gold Trust, the top gold-backed exchange-traded fund, saw the sharpest decline this year on Friday, a sign of bearish investor sentiment.

Weakness in equities, due to insufficient progress on talks between debt-strapped Greece and its creditors, failed to bolster gold. Gold’s price action is bearish and the metal will fall back toward the May 1 low of $1,170, said technical analysts at ScotiaMocatta.

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