By Jan Harvey
LONDON (Reuters) - Gold steadied off a one-week low on Wednesday after Greece said international lenders had rejected its latest proposals to avoid default, knocking stocks, and as the dollar retreated.
The precious metal has declined for the last three days as the dollar strengthened, and as optimism over the prospects for a deal on Greece prompted investors to favour assets seen as higher risk, such as stocks.
Prices hit their lowest since June 15 at $1,173.80 an ounce earlier on Wednesday, before recovering.
Spot gold was at $1,176.90 an ounce at 1218 GMT, little changed from late Tuesday, while U.S. gold futures for August delivery were down 40 cents an ounce at $1,176.20.
"Prices should be a little higher given the situation in Greece. Investors in Europe should definitely be looking at gold as an alternative safe-haven asset," Capital Economics analyst Simona Gambarini said.
"From a technical point of view, the price isn't very well supported at the moment," she said. "Investment demand has been quite weak, which isn't providing much momentum for the price."
European stocks fell after a Greek government official said Prime Minister Alexis Tsipras had told associates that Greece's proposed measures had not been accepted by creditors.
Time is running out before the June 30 deadline when Greece has to repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund, or face default.
The euro was up 0.4 percent against the dollar, recovering from the previous session's two-week low, when the single currency posted its biggest one-day loss since mid-March.
The dollar index eased as U.S. 10-year Treasury yields dipped, with investors' focus slowly shifting from Greece to prospects for higher U.S. interest rates.
Speculation that the Federal Reserve will raise rates for the first time in nearly a decade have weighed on gold prices this year. Higher rates lift the opportunity cost of holding non-yielding bullion, and benefit the dollar.
Physical demand in top consuming region Asia has been sluggish as monsoon concerns weighed on demand in India and a better-yielding stock market kept buyers away in China.
Silver was up 0.6 percent at $15.85 an ounce. Spot platinum was up 0.3 percent at $1,068 an ounce, while spot palladium was up 0.9 percent at $700.50 an ounce.
(Editing by Dale Hudson and Jason Neely)
