Gold Barely Moves Ahead of European Union Summit
Singapore. Gold held nearly steady on Thursday and could trade in a narrow range ahead of a European Union summit, which is unlikely to deliver new measures to tackle the region’s debt crisis and may prompt investors to turn to the safety of the US dollar.
Gold touched a record of about $1,920 an ounce in 2011, when investors turned to the metal as a safe haven during the debt crisis in Europe. But this year, declines in other markets have caused investors to sell gold for cash, sending prices to the lowest in more than four months at $1,527 in mid-May.
Spot gold was little changed at $1,573.99 an ounce by 0019 GMT, having briefly risen to above $1,581 an ounce on Wednesday on bargain hunting.
US gold for August delivery fell $3.60 to $1,574.80 an ounce.
German Chancellor Angela Merkel will pit herself against France and Italy on Thursday at an EU summit that could shape the euro zone’s future, insisting they must put the bloc’s fundamental problems ahead of pleas for emergency action.
Weaker local currencies are weighing on gold demand from India, the world’s largest consumer of the precious metal, and Indonesia, another leading Asian buyer, as traders also favor cash on concerns over a deterioration in the euro zone crisis.
The euro stayed on the backfoot in Asia on Thursday, though its downside was seen limited in case an impending summit of European leaders surprise markets with concrete measures to tackle the region’s debt crisis.
Japan’s Nikkei share average rose at Thursday’s open, supported by domestically driven stocks, although gains could be limited as hopes dwindle for a credible fix to the euro zone’s debt crisis.
US crude rose for a third day on Thursday as positive economic data from the United States and a larger-than-expected fall in oil output from Norway offset concerns that a European summit is unlikely to produce concrete measures to solve the debt crisis.