* Prices slip again in late New York trade with euro
* Euro, gold fall as Greece fails to form coalition
* Platinum Week enters second day in London
(Updates comment, refreshes prices, releads, rewrites
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, May 15 Gold slipped to a fresh
4-1/2 month low on Tuesday as the euro continued to lose ground
to the dollar after Greece's failure to form a coalition
government heightened concerns over Europe's financial crisis
and led investors to spurn risky assets.
After six rounds of fruitless wrangling, Greece abandoned
efforts to form a government and called a new election that some
investors fear may hand victory to the leftists, undo the
country's financial bailout package, and push it closer to
bankruptcy and out of the euro zone.
In response, gold slipped with the euro, which tumbled to
new four-month lows in late New York trade. The euro had fallen
in five of the last six sessions on worries over Greece's June
election prospects, dragging gold down with it.
Spot gold was off 0.88 percent at $1,542.60 an ounce
by 3:30 EDT (1930 GMT). U.S. gold futures for June
delivery were down $18.60 at $1,542.50 an ounce.
Gold hit its lowest level since Dec. 29 at $1,541.10 an
ounce and is down nearly 7 percent so far in May, on track for
its worst monthly performance since December, as talk that
Greece could exit the euro zone has spooked investors.
"The euro has done very poorly against the dollar because of
everything going on predominantly in Greece. Gold has gotten
sold off quite hard in the last couple of sessions. I think
people are unwinding and getting into cash and a little bit of
Treasuries, German bunds, and that's about it," said Fred
Schoenstein, metals trader at Heraeus in New York.
With the precious metal declining to its lowest point since
late December, consumers in top purchasing nations such as India
have come into the market, which analysts said could protect the
bullion price from a more protracted decline.
Some participants view current levels or slightly below as
buying opportunities for the precious metal, which they say will
at some point turn up again.
"Gold's negative on the year, but in the long term, will it
go up? Probably. But, at this point it's just trend following,"
Analysts said any bounce in the euro could run out of steam
above $1.2880-$1.2900, with peripheral bond yields still at
elevated levels, highlighting the risk of contagion from the
Greek deadlock spreading to other euro zone countries.
"(Gold's) safe haven status has been tarnished," Richcomm
Global Services senior analyst Pradeep Unni said. "It will
wobble on the euro's weakness, but in a very short term, bargain
hunting and pent-up demand will emerge taking it higher."
ASIAN BUYERS STEP IN
Despite gold's tendency to decline in line with the euro,
physical demand among major Asian consumers also worked in
gold's favour, traders reported, with buyers stepping in to take
advantage of its slide below $1,550 an ounce.
"Jewellers have been buying a lot. At the moment supply is a
bit tight for immediate delivery," said a physical dealer in
Singapore. "Refiners can't deliver immediate gold because
there's a sudden surge in demand. We're seeing demand from
India, Thailand and Indonesia."
Nonetheless, dealers in major consumer India say more losses
are expected in the precious metal as the rupee strengthens,
making dollar-priced bullion more expensive for local buyers.
Holdings of gold-backed exchange-traded funds monitored by
Reuters, which issue securities backed by the physical metal,
fell by nearly 100,000 ounces on Monday, data from the funds
Among other precious metals, silver dropped to $27.67
an ounce from $28.12 per ounce on Monday, in line with gold's
losses. It fell earlier to $27.56, its lowest since Dec. 30.
Platinum group metals outperformed as the annual Platinum
Group meeting of miners, refiners, traders, recyclers and
consumers in London continued into a second day.
Platinum was off 0.4 percent at $1,428.99 an ounce,
while palladium rose 0.6 percent to $590.53 an ounce.
A report by Johnson Matthey on Monday showed both platinum
and palladium markets in surplus last year. However, palladium
is expected to swing back into deficit next year, on selling of
physical metal by investors and as sales from Russian state
stocks dry up.
(Additional reporting by Amanda Cooper in London and Lewa
Pardomuan in Singapore; Editing by Jason Neely, Alison Birrane
and Jim Marshall)