Gold Prices Slip on Profit Taking, Fears of Greek Default

Gold prices slipped Monday as the euro fell, global stocks declined and investors booked profits from recent gains.

A Federal Reserve announcement on Wednesday that it would extend for as long as another three years ultra-low interest rates left gold prices last week up more than four percent.

So far this year gold is up more than 10 percent, a tempting target for investors who want to lock in profits.

The price has gone up so much, a dealer in Hong Kong told Reuters.

Gold prices also came under pressure in Europe where concerns that Greece will default in the next month or two weighed on stocks and the Eurozone's single currency.

Prospects of Athens declaring bankruptcy, either because it does not qualify for the next huge injection of bailout money or negotiations with creditors on a reduction of its massive sovereign debt, cut interest in gold among investors who see it as a risk asset.

Also, investors in the Eurozone's single currency took profits after it climbed to a six-week high.

The U.S. currency rose, lifting the Dollar Index 0.42 percent to 79.34. The higher the dollar goes the more it weighs on the price of gold by making purchases of the yellow metal more expensive.

Asian purchases of physical gold was subdued.

Stocks in Asia and Europe were broadly lower. In the U.S., futures on the S&P 500, the Dow Jones Industrial Average and the Nasdaq 100 were lower.

Gold for February delivery was off $11.30 to $1,724.10, while spot gold fell $7.50 to $1,720.33.

Silver for March delivery declined 53 cents to $33.26, while spot silver was off 10 cents to $33.21.