LONDON, June 26: Gold slipped further and silver touched a one-month low on Tuesday as a firmer dollar versus the euro reduced investor appetite for the metals.

Weaker oil prices and expectations for higher interest rates around the world also dampened sentiment, with the metals vulnerable to further drops on technical selling, analysts said.

Gold has been struggling for a few days now. It's very much on the defensive. There are distinct signs of nervousness about the interest rate outlook, Stephen Briggs, economist at SG Corporate and Investment Banking, said.

Ultimately the reason that matters for gold more than anything else is because of it being an asset with no yield. The opportunity cost of holding it in a rising interest rate environment increase.

A fall in gold price to the $645 area might increase the chance of an acceleration down towards the low $630s, he said.

Spot gold was at $649.00/649.60 an ounce as of 1013 GMT, compared with $650.80/651.40 late in New York on Monday.

The dollar gained against the euro, while oil prices eased below $71 a barrel as investors weighed ample fuel stocks in top consumer the United States and the potential for higher Nigerian crude exports.

A firmer dollar makes gold costlier for holders of other currencies and lowers bullion demand. The metal is also often seen as a hedge against oil-led inflation.

Market players awaited a series of US data, including new home sales and consumer confidence reports due on Tuesday. Also, the US Federal Reserve's two-day policy meeting, ending on Thursday, will be watched for clues on the central bank's views on the economy's health.

US economic data released in the afternoon might be a double-edged sword for gold. Given the recent concerns driving the equity markets, weak data could weigh on stock prices and this might outweigh the impact of the US dollar on gold, Dresdner Kleinwort Investment Bank said in a daily note.

Palladium was at $367/371 an ounce, little changed from $367.50/371.50, while platinum fell $1 to $1,279/1,283 from its level on Monday , when it fell $15.

The rally in the white metal has run out of steam for now, but expectations that auto makers may begin replenishing stocks as the second quarter rolls on continue to underpin the downside.—Reuters