LONDON, Dec 13 (Reuters) - Spot gold fell to a seven-week low on Tuesday, extending a 2.6 percent decline in the previous session, on concerns ratings agencies may downgrade some euro zone nations over a lack of concrete plans to tackle the debt crisis.
The euro languished near a two-month low, and although equities steadied they remained vulnerable to further falls as investors remained unconvinced about the effectiveness of decisions made at last week's EU summit.
A weaker euro vs the dollar makes gold priced in the U.S. unit more expensive for holders of the euro zone currency.
"I suspect that the euro will remain under pressure," said Citi analyst David Wilson.
"If we do get any sovereign downgrades by the S&P this week I suspect the euro will be under even more pressure. It's difficult to see short-term what's going to lift gold."
Investors will closely watch for moves by the ratings agencies. Moody's Investors Service said on Monday it intends to review the ratings of all 27 members of the European Union in the first quarter of 2012 after EU leaders offered "few new measures" to resolve the crisis in a summit on Friday.
Standard & Poor's last week warned of a possible downgrade of 15 euro zone nations. In addition, the Italian and Spanish bond sales later this week will be a barometer of market sentiment.
Spot gold lost 0.15 percent to $1,653.14 an ounce by 1045 GMT, after posting its biggest one-day drop in nearly three months in the previous session. It touched $1,650.89 earlier, its lowest since Oct. 25.
U.S. gold declined 0.02 percent to $1,657.60.
"It's all about anxiety and worry," said Nick Trevethan, Senior Commodities Strategist at ANZ in Singapore. "Gold is just getting lumped in with other markets as risky assets, not necessarily for the right reason."
Wild swings in gold prices since August have tarnished its reputation as a safe haven, and bullion has moved in tandem with riskier assets in the past few months.
"The bigger macro issues are still there, which would generally be supportive for gold, but right now it's all about the noise around the continued political failure in Europe," Wilson said.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported that its holdings dropped 0.605 tonnes to 1,294.796 tonnes by Dec. 12, the lowest in three weeks.
Physical buying picked up in Asia after the sharp decline in prices, but many were hesitant to buy in bulk ahead of the year-end, especially as market sentiment remains fragile on concerns about Europe's troubles, dealers said.
Spot platinum rose 0.8 percent to $1,491.99 an ounce, off a seven-week low of $1,476.23 hit in the previous session.
