By: Reuters
Spot gold was steady on Tuesday, supported by safe-haven demand on resurfacing uncertainty over the euro zone's efforts to resolve its debt crisis, while a strong dollar weighed down prices.
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AP
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Italian and Spanish bond yields soared ahead of a key Group of 20 meeting that would likely press European leaders on details of how to tackle the crisis.
The Dollar also surged nearly 1 percent against a basket of currencies, a day after Japan's massive intervention pushed the Dollar Index[.DXY 77.07 
0.91 (+1.19%) 
] up 1.5 percent.
0.91 (+1.19%) ] up 1.5 percent.
"The European problems will resurface through the end of the year," said Dominic Schnider, head of commodity research atUBS Wealth Management [UBS 12.62 
-1.22 (-8.81%) ] in Singapore, expecting safe-haven demand to help prices revisit a record high of above $1,920 by year-end.
-1.22 (-8.81%) ] in Singapore, expecting safe-haven demand to help prices revisit a record high of above $1,920 by year-end.
But recent gains in commodities, cause by bursts of optimisim over Europe, may be wiped out if the crisis is not resolved soon, Schnider added.
Spot Gold [XAU= 1708.6899 -5.26 (-0.31%) ] was little changed at $1,714.54 an ounce by 0701 GMT, after staging a monthly rise of 5.5 percent in October.
-5.26 (-0.31%) ] was little changed at $1,714.54 an ounce by 0701 GMT, after staging a monthly rise of 5.5 percent in October.
U.S. Gold [GCCV1 1711.80 -13.40 (-0.78%) ]
-13.40 (-0.78%) ]
Adding to the worries about euro zone, Greece's prime minister called a referendum on the latest bailout deal.
The fallout from the collapse of MF Global Holdings Ltd [MF.N 1.20 -0.23 (-16.08%) ] rippled through global exchanges on Tuesday, as operators moved to suspend the U.S. futures broker or limit trades of its customers.
-0.23 (-16.08%) ] rippled through global exchanges on Tuesday, as operators moved to suspend the U.S. futures broker or limit trades of its customers.
The weaker-than-expected China official purchasing managers index for October increased the gloom on the global economic outlook, but it also reinforced the expectation that China's central bank could soon start to loosen up its monetary policy.
Physical market activities were muted, and premiums in Hong Kong eased to near $1 an ounce over spot prices, from $1-$1.50 last week.
"Jewellery sector demand has been quiet as jewellers are unwilling to keep much of an inventory," said Dick Poon, manager of precious metals of Heraeus in Hong Kong.
"They are worried about consumption in Europe and the United States in Christmas holiday season, with the economic uncertainty looming large."
Physical buying slowed to a trickle after prices recovered to above $1,700 last week, from an October trough of $1,603.49 on Oct 20, dealers said.
Copyright 2011 Thomson Reuters. Click for restrictions.
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