Gold falls as stronger dollar offsets impact of mixed U.S. data

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON (Reuters) - Gold eased on Monday as the impact of a rebounding dollar, bolstered by persistent concern about future Greek debt payments, outweighed U.S. data supporting bets the Federal Reserve will not raise rates until late 2015.

Spot gold was down 0.4 percent at $1,183.10 ounce by 3:05 p.m. EDT (1905 GMT), while U.S. gold settled down 0.5 percent at $1,183 an ounce.

The dollar rose 0.2 percent versus a basket of currencies, mostly due to euro weakness, as Greek Finance Minister Yanis Varoufakis said the liquidity situation was "terribly urgent" and a deal to release further funds was needed in the next couple of weeks.

"The market has become more bearish ... the Greek crisis doesn't seem to be enough to ignite trading decisions," Societe Generale analyst Robin Bhar said. "There are U.S. retail sales on Wednesday, which could provide another stepping stone for a rate hike in September after Friday's data."

Holdings in SPDR Gold Trust, the top gold-backed exchange-traded fund, saw the sharpest decline this year on Friday.

The U.S. currency had weakened after U.S. jobs data on Friday showed April nonfarm payrolls increased roughly in line with forecasts, but the March figure was revised significantly downward.

The data tempered views that a U.S. rate rise could come at the Federal Reserve's next policy meeting in June. San Francisco Fed President John Williams, however, said in a CNBC interview on Monday that the Fed should not telegraph ahead of time exactly when it will begin to raise interest rates, putting markets on notice for more volatility in the coming months.

"Momentum likely remains to the downside against medium-term expectations of a reversal in dollar weakness and continued selling in gold long positions," Morgan Stanley said in a note.

Spot gold has remained below the key $1,200 level for seven sessions straight.

"While we acknowledge that the gold price could fall substantially below $1,200 per ounce for a period as a consequence of early Fed tightening, we see this negative risk as more than offset by the positive upside for gold from any

escalation of the Greek crisis," Capital Economics said in a note.

The research company forecast gold prices rising to $1,250 in the second quarter and $1,400 in the fourth quarter.

Silver fell 1.1 percent to $16.25 an ounce. Platinum dropped 1.5 percent to $1,123.04 an ounce, while palladium was down 2.4 percent at $778.75 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Jason Neely, David Holmes and Christian Plumb)