RTRS: Gold ticks lower as euro stabilises; Spain supports
By Lewa Pardomuan
SINGAPORE (Reuters) - Gold edged down on Monday as the euro steadied against the U.S. dollar, but worries about Europe's debt woes still underpinned sentiment after Fitch downgraded Spain's credit rating.
Volume was thin as the United States and the UK are on holiday on Monday, but dealers expected bargain hunters to resurface at lower levels. Gold hit a record of $1,248.95 in mid-May on fears euro zone credit problems were spreading.
Spot gold was at $1,211.00 an ounce by 0143 GMT, down $1.75 from New York's notional close on Friday. U.S. gold futures for August delivery fell $2.6 an ounce to $1,212.4 an ounce.
"There is a chance for some wild movements if you get a bit of volume come in, but for the time being I wouldn't expect too much," said Darren Heathcote, head of trading at Investec Australia in Sydney.
"I think will be a wait-and-see approach," said Heathcote, adding that bullion would be looking at currencies for direction.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings were unchanged at a record of 1,267.930 tonnes as of May 28.
The euro was steady at $1.2282, holding above a four-year low of $1.2143 hit this month, but the currency was still under pressure after the Fitch downgrade of Spain.
Fitch cut Spain's credit rating by one notch to AA-plus on Friday, saying the country's economic recovery will be "more muted" than the government forecast due to its austerity measures.
Japan's Nikkei average lost 0.2 percent on Monday after the Spain downgrade spooked global investors and sent Wall Street lower.
Analysts also expected volatile trading in gold, which had attracted buying from investors worried about the fate of the euro.
"The question remains as to what will happen to this metal in the currently opaque scenario," Heraeus Precious Metals said in a weekly report.
"The charts are of little help at the moment, even though gold finds itself in a short-term upward trend that could theoretically see it touching $1,230 an ounce. On the other side, it will get critical once the $1,200 mark is broken."
U.S. crude futures were mostly steady just under $74 a barrel on Monday in thin trading, with U.S.-based traders off for the three-day U.S. Memorial Day holiday weekend.
