Gold futures retreated as fresh worries about financially strapped Greece pressured demand for perceived riskier assets.
In recent trading, most-actively traded June gold was down $9.30 U.S., or 0.8%, at $1,151 U.S. an ounce on the Comex division of the New York Mercantile Exchange. Thinly traded nearby April gold was down $10.20 U.S., or 0.9% at $1,149.50 U.S. an ounce.
With gold trading as a so-called risk play, the metal is lower as market participants favor the perceived safety of the U.S. dollar amid a fresh round of concerns about Greece's ability to finance its debt. The ICE Futures U.S. Dollar Index was recently up 0.248 points, or 0.3%, at 80.730 points.
The uncertainty comes as euro-zone finance ministers meeting in Madrid on Friday addressed the issue of Greek debt but offered no specifics on how a plan might be implemented. The ministers are also to meet Saturday. Greece, in a letter Thursday, asked the European Union and International Monetary Fund for formal discussions to begin on an aid package; the cash-strapped country has not yet formally asked for aid.
The ongoing Greek debt saga has been a key driver of the amount of risk investors want to take in various market sectors in recent weeks, alternately pressuring or supporting perceived riskier holdings like metals, high-yielding currencies and equities.
Positive housing data also helped the dollar. Housing starts increased 1.6% to a seasonally adjusted 626,000 annual rate compared to the prior month, the Commerce Department said.
A stronger dollar often pressures gold because a more muscular greenback makes the dollar-denominated metal more expensive for buyers using other currencies, damping demand.
The price declines in gold come as the number of open Comex gold futures contracts is slipping, after a period of fresh buying. That may be a sign that gold could be entering a correction, says MF Global analyst Tom Pawlicki.
The latest data, out Thursday, show a decline of 198,300 ounces in open gold contracts, leaving them at 52,687,300 ounces.
