Gold prices bounced back today as the Euro firmed ahead of the two-day European Union summit, which will kick off in Brussels today. EU leaders will be looking to find consensus on the issue of providing debt-stricken Greece with financial aid to help it tackle its financial problems. Last week, President of the European Commission Jose Manuel Barroso urged the euro zone states to agree on a bailout for Greece, however, Germany has fiercely opposed such a move, stating that Greece would have to turn to the International Monetary Fund (IMF) for help before receiving a bailout from the EU. Greece’s fiscal problems have been weighing on Europe’s single currency for weeks, putting pressuring gold, which is seen as a riskier alternative and usually moves inversely to the US dollar. Portugal has added to Europe’s debt woes this week after rating agency Fitch cut its sovereign debt to AA- after warning of a possible downgrade earlier this month. Meanwhile, holdings in the world’s largest gold-backed exchange fund SPDR Gold Trust (NYSE: GLD) increased by over 4.5 metric tons to 1,120 tons on Tuesday, suggesting higher demand for the yellow metal. Gold advanced to US$1,094/oz, while silver and platinum rose to US$16.78/oz and US$1,589/oz respectively. Blue chips miners were mixed, while midcaps were in demand, posting gains of over 1%.

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