Gold regained some lost territory from the previous session Monday supported by a weaker dollar, but analysts said that easing concern about Greece's debt crisis has diminished gold's appeal as a safe haven in the short term. Euro zone finance ministers have approved a 12 billion euro installment of Greece's bailout, sending the euro to a one-month high against the dollar. The dollar edged down 0.3 percent against a basket of currencies. Gold dipped below the key support level of $1,500 in the last session, and faces strong headwinds in the short term, traders and analysts said. "After Greece passed the austerity measures, market participants will need to find another reason to buy into gold," said Ong Yi Ling, an analyst at Phillip Futures. "But right now it's hard to find a catalyst for gold prices to push higher." The price outlook for the rest of the year however remains bullish, supported by the wobbly economic recovery in the United States and high inflation in major fast-growing economies like China and India, analysts said. In London, gold prices rose 0.6 percent Monday as investors took advantage of the metal's dip to six-week lows last week to buy into the market and on expectations the euro will extend gains versus the dollar. Spot gold was bid at $1,495.20 an ounce, against $1,485.80 late in New York Friday. US gold futures for August delivery rose $13.30 an ounce to $1,495.90. Greece last week approved austerity measures needed to access another tranche of funding from the European Union and IMF, sparking a relief rally in some assets seen as higher risk and weighing on gold. Its drop to six-week lows below $1,480 an ounce prompted some bargain hunting Monday, however. “Sentiment on gold is still far from ideal,” said Andrey Kryuchenkov, an analyst at VTB Capital. “This is buying on the lows (after) Friday's retreat.” Silver was bid at $34.05 an ounce against $33.94. Spot platinum was bid at $1,719.50 an ounce versus $1,734.95, while spot palladium was at $758.22 an ounce against $754. Gold has seen some physical buying return, especially in the major Asian markets, after its dip below $1,500 an ounce, but this has been muted by seasonal factors. Summer is typically a quiet time for gold buying. “The seasonality of physical demand suggests that gold won't be able to rely on the same depth of physical interest in July as it could in January,” said UBS. “We do expect physical buyers to react to lower prices but don't expect strong interest until prices get below $1,480.”
