Gold retains gains near $1,185 on safe-haven bids

Gold was trading firmly near $1,185 an ounce on Tuesday, clinging to overnight gains as Greece's failure to strike a deal with its creditors triggered safe-haven bids.

Spot gold was steady at $1,184.78 an ounce by 0025 GMT, after gaining 0.5 percent on Monday.

Greece and its creditors hardened their stances on Monday after the collapse of talks aimed at preventing a default and possible euro exit, prompting Germany's EU commissioner to say the time had come to prepare for a "state of emergency".

Athens now has just two weeks to find a way out of the impasse before it faces a 1.6 billion euro repayment due to the International Monetary Fund, potentially leaving it out of cash, unable to borrow and dangling on the edge of the currency area

Stock markets around the world fell on Monday, pressured by the collapse of 11th-hour talks between the near-bankrupt Greece and its creditors, with investors worried about the possibility the country could default.

Gold was well-bid as it is often seen as an alternative investment during times of financial and economic uncertainty.

Also in focus this week is the Federal Reserve's two-day policy meeting that kicks off on Tuesday.

Investors will be closely monitoring comments from the Fed chair Janet Yellen on when the U.S. central bank could raise interest rates, which are currently near record lows.
Higher rates would diminish demand for non-interest-yielding bullion.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.30 percent to 701.90 tonnes on Monday, the lowest since 2008. Persistent outflows can undermine any rally in prices.