Gold may rebound after dropping from a record as concern that Europe’s leaders will struggle to resolve the region’s sovereign-debt crisis at a meeting tomorrow increased haven demand. Immediate-delivery gold was little changed at $1,590.3 at 2:27 p.m. in Singapore after gaining as much as 0.3 percent. The metal touched an all-time high of $1,610.10 yesterday before closing 1 percent lower after President Barack Obama backed a plan to cut the U.S. deficit, potentially paving the way for raising the debt ceiling and avoiding a default. European Union chiefs are set to gather in Brussels to discuss a second Greek rescue and curb contagion that’s spreading to Italy and Spain. While German Chancellor Angela Merkel said yesterday that the problem can’t be solved in one step, the International Monetary Fund said the crisis may hurt the rest of the euro region even if officials do avert a default. “The broader uptrend hasn’t changed,” said Sun Yonggang, an analyst at Everbright Futures Co. who was ranked eighth in an online poll of gold analysts in China that was conducted by the Futures Daily and Securities Times earlier this year. “The mood will remain nervous ahead of the European meeting.” Holdings of the metal in exchange-traded products dropped to 2,120.2 metric tons yesterday, snapping the longest period of gains since August. Assets totaled 2,120.513 tons on July 18, the highest level ever, data compiled by Bloomberg show. Best Run Gold for August delivery in New York fell as much as 0.9 percent to $1,587 an ounce, after rising to a record $1,610.70 yesterday. Cash silver gained 0.2 percent to $39.13 an ounce. “It wasn’t surprising to see the pullback last night given that gold had risen continuously for 11 days,” Sun said by phone from Shanghai. Before yesterday’s drop, spot gold had its best run since 1980, Bloomberg data show. Obama called the $3.7 trillion debt-cutting proposal by a bipartisan group of senators “broadly consistent” with what he’s sought and “a very significant step” in so-far deadlocked talks. The plan would combine tax rises and spending cuts and may allow policy makers to agree on raising the $14.3 trillion debt ceiling before a potential U.S. default on Aug. 2. Spot platinum increased 0.5 percent to $1,773.5 an ounce and palladium climbed 0.6 percent to $793.88 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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