Gold traded near the lowest level in a week before Federal Reserve policy makers gather and as European finance ministers agreed to work with the new Greek prime minister to keep the country in the euro.
The finance ministers began considering how to revive Greece’s rescue program and signaled their willingness to do a deal with Alexis Tsipras. The Federal Open Market Committee begins a two-day meeting as policy makers weigh the timing of an interest-rate increase. Gold rose 8.2 percent this month, partly amid speculation the Fed would hold off on raising borrowing costs, and as uncertainty in Greece spurred demand for a haven.
“The weakness we’re seeing in gold is coming from a sense of order being restored,” Matthew Turner, an analyst at Macquarie Group Ltd. in London, said by phone. “There’s a dialing down of the fear that has propelled gold higher. The focus now moves to the U.S.”
Bullion for immediate delivery was little changed at $1,281.49 an ounce by 11:14 a.m. in London, after dropping earlier Tuesday to $1,272.44 an ounce, the lowest price since Jan. 19, according to Bloomberg generic pricing. Bullion for April delivery was 0.1 percent higher on the Comex at $1,282.10. Futures trading volume was about 63 percent above the 100-day average for this time of day, according to data compiled by Bloomberg.
Some 45 percent of 53 economists in a Bloomberg survey said the Fed will raise the benchmark rate in June. Rising rates dent the appeal of gold as it tends to offer returns only through price gains.
Holdings in bullion-backed exchange-traded products gained for a fifth session Monday, climbing to 1,648.3 metric tons, the highest since October.
Silver for immediate delivery was little changed at $17.9052 an ounce. Platinum rose 0.2 percent to $1,255.63 an ounce, while palladium climbed 0.2 percent to $782.30 an ounce.