Gold Steady as Market Eyes EU Summit

By: Reuters

Gold prices held steady on Tuesday after gaining for two consecutive sessions, as investors wait for European leaders to agree on a strategy to solve the euro zone debt crisis at a gathering on Wednesday.

Anthony Bradshaw | Photographer's Choice RF | Getty Images

Spot gold [XAU=  1659.10    6.92  (+0.42%)   ]edged down 0.2 percent to $1,649.59 an ounce by 0025 GMT, after rising 2 percent over the past two sessions.

U.S. gold [GCCV1  1655.70    3.40  (+0.21%)   ]was little changed at $1,651.50. 

As investors wait for the second European Union summit on Wednesday, business surveys showed that business activity at manufacturers and service sector companies in the euro zone further contracted from the previous month.

The U.S. Federal Reserve  could potentially do more to drive down mortgage rates to support the housing sector, and another round ofquantitative easing  is one possible option for the central bank to boost growth, said William Dudley, president of the New York Federal Reserve Bank.

Holdings in SPDR Gold Trust [GLD  161.02    1.50  (+0.94%)   ], the world's largest gold-backed exchange-traded fund, gained about half a percent to 1,233.564 tonnes by Oct. 24, after standing unchanged throughout last week.

U.S. stocks rose on Monday, as a flurry of merger activity and strong earnings from Caterpillar boosted investor sentiment and kept the three-week rally intact.

The euro edged lower on Tuesday, after hitting a six-week high against the dollar in the previous session, as investors grew confident European leaders will come up with a broad agreement to deal with euro zone's debt crisis at the summit scheduled for Wednesday.