Tuesday gold increased again to above $1,500 an ounce in Europe regaining its losses in line with oil prices as hopes that Greece's debt crisis may be contained tempered risk aversion.

Gold is closely linked to foreign exchange moves, as it is often traded as a currency.

Spot gold was bid at $1,501.39 an ounce at 1108 GMT, against $1,496.20 late in New York on Monday. U.S. gold futures for August delivery GCv1 rose $5.90 an ounce to $1,502.30.

"Even with the events going on in Europe, the euro-dollar has still been at $1.40-1.42 -- still quite an undervalued level for the dollar, despite what is going on in Europe," said Michael Lewis, head of commodities research at Deutsche Bank.

"If there is any slight marginal improvement in Europe, and if the European Central Bank is going to be starting to raise rates in September and December, you might have a currency story that could be quite positive for gold."